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Osborne Announces UK Budget Date

by Robert Lee,, London

08 November 2010

UK Chancellor of the Exchequer George Osborne has confirmed that the budget will take place on Wednesday March 23, 2011.

Appearing before the House of Commons Treasury Select Committee on Thursday, Osborne revealed that the 2011 budget would contain details of a new departmental funding framework designed to buttress the coalition government's plans to rein in public spending over the next five years. Osborne has already announced more than GBP80bn in spending cuts over the course of the parliament to reduce the budget deficit, which stands at more than GBP150bn.

It is unclear as yet unclear whether the government will seek to generate additional revenues from taxation; the emergency budget announced last June included an increase in the rate of value-added tax by 2.5% from January 2011, plans for a bank levy, additional measures to clamp down on tax avoidance and a rise in capital gains tax by 10% to 28% for higher rate taxpayers. The government also shows no inclination to lower or abolish the new 50% top rate of tax on earnings over GBP150,000 per year.

While the corporate tax rate is being cut by 5% over the course of the coalition's parliamentary term, various corporate tax reliefs will be repealed to make this measure revenue neutral.

During Thursday's hearing, Osborne fended off accusations from committee members that he had exaggerated the extent of the UK's fiscal crisis in order to drive through his sweeping austerity package.

Committee Chairman, Andrew Tyrie, a Conservative Member of Parliament, suggested to Osborne that he had been a "bit over the top" with his claim that Britain was on the verge of bankruptcy and was "over-egging it a bit" by insisting that the emergency budget was "progressive."

"The largest bond investor in the world was saying that UK gilts were a no-go area, sitting on a bed of nitroglycerine," Osborne responded. "I have done everything I can to move Britain out of the financial danger zone."

TAGS: tax | fiscal policy | budget | United Kingdom

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