LONDON – Britain’s Treasury chief unveiled a budget Wednesday that included billions in cuts and an eye-catching levy on sugary drinks, underscoring his claim that this was a plan for the next generation.
George Osborne warned of “a dangerous cocktail of risks” as he delivered a spending plan in which Britain acts “now so we don’t pay later.” He offered 3.5 billion pounds ($4.9 billion) in cuts by 2020 to achieve his target of balancing the books in the face of weaker global economic growth and repeatedly insisted he was focused on the future.
He announced changes in the school system and pledged taxes on sugar-laden sodas to cut obesity in the young, a cause championed by celebrity chef Jamie Oliver.
“In this budget we choose the long term,” he said. “We choose to put the next generation first.”
But he was forced to acknowledge that debt would rise as a proportion of gross domestic product, missing his own target. And growth forecasts were cut in the face of a slowdown in the broader global economy.
As a result, Osborne argued it was a moment for caution over state finances.
“Britain is not immune to slowdowns and shocks,” he said. “Nor as a nation are we powerless. We have a choice. We can choose to add to the risk and uncertainty, or we can be a force for stability.”
Mindful of the dramatic recent drop in oil prices, Osborne also offered tax relief to companies operating in the North Sea. But even as he offered relief to many in Scotland whose jobs depend on offshore oil operations, he chided Scottish National Party lawmakers, who had argued that oil revenues would underpin the economy during their campaign last year for independence.
“We are only able to provide this kind of support to our oil and gas industry because of the broad shoulders of the United Kingdom,” he said.
Taxe relief was also offered for the wealthy and for small businesses. The disabled will face cuts. He pledged to crack down on tax-dodging.
Labour leader Jeremy Corbyn described the budget as being fundamentally unjust.
“This budget has unfairness at its very core, paid for by those who can least afford it,” he said. “He could not have made his priorities clearer — while half a million people with disabilities are losing over 1 billion pounds in personal independence payments, corporation tax is being cut and billions being handed out in tax cuts to the very wealthy.”
The Office for Budget Responsibility downgraded its forecast of economic growth in 2015 from 2.4 per cent to 2.2 per cent and in 2016 from 2.4 per cent to 2 per cent. There were also trimmed for the subsequent years through 2020.
The office also offered a caveat, arguing that all the figures did not take into account the uncertainty that would follow should Britain vote to leave the European Union in a popular vote in June.