Fin24

Osborne sticking with UK austerity plan

2012-12-02 13:32

London - British finance minister George Osborne said on Sunday that he would stick with his deficit-reduction programme when he presents a half-yearly fiscal statement on Wednesday.

The Chancellor of the Exchequer declined to comment more specifically on whether he would be able to meet debt targets, but stressed he did not believe Britain should borrow more or increase spending.

At his "Autumn statement" on Wednesday, Osborne is expected to defend his stringent economic policies as the only credible way of solving the government's biggest political problem - its failure to deliver a strong recovery.

"It's clearly taking longer to deal with Britain's debts, it's clearly taking longer to recover from the financial crisis than anyone would have hoped, but ... to turn back now ... would be a complete disaster for our country," he said in a BBC television interview.

British media reported on Sunday that Osborne plans to cap the amount of tax relief high earners receive on their pension contributions alongside reining in the welfare budget.

Osborne declined to comment on the reports, but did not reject the proposals directly when questioned in the interview.

He also declined to say if the country's independent fiscal watchdog would show him still on track to eliminate Britain's underlying budget deficit within the next five years, or to have debt as a share of national income on a downward path by the 2015/16 tax year.