Britain to unveil crunch 2009 budget

Tuesday, April 21, 2009 at 9:43 PM Posted by Beijing News


Recession-hit Britain unveils its annual budget Wednesday, which is set to include further measures aimed at boosting an economy that has been slammed by the global financial crisis.

Prime Minister Gordon Brown will also be hoping that his Labour government's 2009/10 tax and spending plans boost his fortunes ahead of a general election that must be held by the middle of next year.

Brown told cabinet colleagues on Tuesday that November's decision to slash the sales tax VAT on goods and services has had a positive impact on the British economy, which is suffering its first recession since 1991.

"We were always confident that a VAT cut was the quickest and most effective way of injecting money into the economy, and getting money into the hands of millions of families including those who don't pay income tax," Brown's spokesman told reporters.

"But we must also ensure that through the downturn we continue to invest for the future, while ensuring that the public gets value for money. That will be a theme of the budget."

Finance minister Alistair Darling will deliver the budget before parliament at 12:30 pm 1130 GMT against a backdrop of soaring unemployment and public debt, negative inflation and slumping tax revenues.

Brown, meanwhile, will be hoping it can turn the page on a string of recent political scandals, including this month's resignation of a top adviser over a planned smear campaign against the main opposition Conservative Party.

Labour lags behind the centre-right Conservatives by up to 19 points, according to recent opinion polls.

Ahead of the budget, experts warned that tax cuts or public spending increases would be hard to justify.

The public purse has been stretched by a series of costly bailouts in which the government has rescued some of the country's biggest banks from the international credit crunch.

Darling, whose official title is chancellor of the exchequer, is also expected to rip up his economic growth projections in light of a deepening recession, which began in the second half of 2008.

In the pre-budget report last November, Darling launched a 20 billion-pound 22.6 billion-euro, 30.0 billion-dollar economic stimulus package of tax cuts in an attempt to get consumers spending again.

He has also deferred plans to increase business rates by 5.0 percent this month, saying he would stagger the increase over the next two years instead.

Meanwhile, speculation is building that the government could launch a scrappage scheme to boost the crisis-hit carmaking sector with incentives for motorists to swap old vehicles for new models.

It was also expected to launch measures aimed at boosting Britain's struggling property market.







Weel

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