In the United Kingdom, a once-in-a-generation budget promised before the election has finally materialized.
In the public sector, only a few departments escaped the sweep of Chancellor George Osborne’s austerity axe, which is to slice 25 percent off all government departments over the next four years.
The chancellor’s budget went even further than previously suggested, with the aim of balancing the country’s books in the next five years. Before, the Conservatives had talked only of eliminating the “bulk” of the structural deficit by the next election.
Osborne kept to a ratio of 1 to 4 in terms of balancing both tax rises and spending cuts. The predominant tax increase will come from a 2.5 percent hike in value-added tax (VAT), from 17.5 to 20 percent. The economic mess left by the previous government had left them with no choice but to increase the VAT, despite a promise not to do so ahead of the election.
In the public sector, only a few departments escaped the sweep of Chancellor George Osborne’s austerity axe, which is to slice 25 percent off all government departments over the next four years.
The chancellor’s budget went even further than previously suggested, with the aim of balancing the country’s books in the next five years. Before, the Conservatives had talked only of eliminating the “bulk” of the structural deficit by the next election.
Osborne kept to a ratio of 1 to 4 in terms of balancing both tax rises and spending cuts. The predominant tax increase will come from a 2.5 percent hike in value-added tax (VAT), from 17.5 to 20 percent. The economic mess left by the previous government had left them with no choice but to increase the VAT, despite a promise not to do so ahead of the election.
