British Chancellor George Osborne downgrades growth forecast in annual budget

March 20, 2013



The British George Osborne delivered the budget today, an annually-held audit of the country's finances deciding how taxpayers' money should be spent. He set out plans to boost the in his fourth budget, as well as stating the economy will grow by 0.6% &mdash; half his prediction four months ago.

George Osborne revealed plans to improve the housing market, including a "Help to Buy" scheme which would offer buyers who can place a 5% deposit on a new house, a 20% loan to buy it. He said: "This is a budget for those who aspire to own their own home". He also offered a new Mortgage Guarantee, created in conjunction with mortgage lenders — the scheme would allow them to offer loans to homeowners without the need for a large deposit and offer guarantees to support up to 130bn of lending for three years beginning in 2014.

As a measure to attract to the, he announced to reduce  from 21% to 20% taking effect from April 2015. The rate of corporation tax has fallen from 28% in 2010 to the current level of 21%. The United Kingdom is to have lower rates of corporation tax than the USA at 40%, France at 33%, and Germany at 29%.

The (OBR) stated the government debt reduction programme to reduce the  will miss its targets. The government has forecast the will begin to fall by the financial year 2015/2016, while OBR says national debt will reach a high of 85.6% of, £1.58 trillion, in 2016/17. Osborne defended the government efforts to reduce the deficit and said: "Our judgement has since been supported by the IMF, the and the  of the ."

In response to the Budget speech, the Ed Miliband said: "At the worst possible time for the country. It’s a downgraded budget from a downgraded Chancellor [...] Debt is higher in every year of this Parliament than he forecast at the last Budget. He is going to borrow £200 billion more than he planned."

The  said to , "They are borrowing £245bn more in this Parliament, we said all along …said this two years ago, if they had moved more quickly with a sensible, targeted package of measures to kick-start the economy, which would have meant at that time more borrowing for a VAT [] cut to bring forward housing investment, then we would have got the economy growing and the deficit coming down."

The Vince Cable told the BBC in an interview, the "age of austerity" would probably end within the current decade, but made no more definite forecast.

The head of the British, John Walker, said: "The Budget opens the door for small businesses to grow and create jobs. The Chancellor has pulled out all the stops with a wide ranging package of measures to support small business. [...] [W]e are pleased to see the scrapping of the 3p fuel duty due in September".

, the General Secretary of, criticized the budget for not helping working families. He said: "This is a Budget for the few by the few that attacks the many. Millionaires are days away from getting a £40,000 tax cut from the Tories, but George Osborne is using the budget to attack hard-working public sector workers. The worst chancellor in British history has gone further by giving big business another tax cut while staff caring for the sick get pay cuts. [...] [H]e should have raised the national minimum wage by £1 and drop the senseless plan to give millionaires a tax break in a few days' time".