Britain will delay cutting back its record budget deficit, the chancellor of the exchequer made clear on Wednesday as he presented his last budget before a coming general election.
Britain is recovering from one of the worst recessions in its history and its current budget deficit is the highest it has ever been in peacetime. The election is expected to take place on May 6.
But Chancellor of the Exchequer Alistair Darling said that debts were lower than expected and that the government would continue to boost the economy with state-financed measures.
The new budget, which included taxes that target the better-off, is likely to be seen as part of an election strategy designed to appeal to the ruling Labour Party's core voters.
“The task now is to bring down borrowing in a way which does not damage the recovery or the front-line services on which people depend,” the chancellor said.
In the coming financial year, which starts in April, government borrowing would stand at 163 billion pounds (243 billion dollars), 13 billion pounds less than expected, Darling said.
But it still makes up 11 per cent of the country's gross domestic product (GDP) and is way over the EU's 3 per cent limit.
Amid laughter from the opposition, Darling promised to halve the deficit in four years. From 2011, the country would face cuts that would be “the toughest for decades,” he said.
But EU Monetary Affairs Commissioner Olli Rehn was strongly critical of Britain's budget. Britain was the only country in the EU which hadn't kept to the EU's saving plans, he said.
Last year the EU gave London the target of reducing its budget deficit to three per cent of GDP by the financial year 2014-15.
The opposition Conservative Party, led by David Cameron, immediately dismissed the package.
”Labour have made a complete mess of the economy and they have done nothing to clear it up,” said Mr. Cameron.
“They have doubled the national debt and on these figures they are going to double it again,” he added.