Britain to hold emergency budget on June 22

17th May 2010, Comments 0 comments

Britain's new coalition government will hold an emergency budget on June 22, finance minister George Osborne announced Monday as he laid out plans to tackle the nation's record deficit.

The budget will be based on forecasts from a new independent body, he said, which will make an audit of everything from outstanding contracts to pension liabilities to assess the scale of the challenge facing the new administration.

The Conservative-Liberal Democrat coalition led by Prime Minister David Cameron has made tackling the deficit a priority and promised cuts worth six billion pounds (8.7 billion dollars, seven billion euros) this year.

In their coalition agreement, signed five days after May 6 elections produced a hung parliament, the government promised its first budget within 50 days.

Osborne said he believed they needed "to act even sooner to restore confidence in our economy", which has been battered by a deep recession.

"The budget date will be Tuesday, 22 June, exactly six weeks or 42 days from the signing of the coalition agreement," he told reporters.

Osborne also announced the creation of a new Office for Budget Responsibility to make a "truly independent assessment" of the scale of the deficit and to make forecasts of economic growth and government borrowing.

"For the first time we will have a truly independent assessment of the state of the nation's finances," he said.

The chancellor of the exchequer admitted he was creating a "rod for my back" but said: "That is the whole point. We need to fix the budget to fit the figures, not fix the figures to fit the budget."

The OBR would produce a first set of figures before the emergency budget, when Osborne will set out the government's spending plans, measures to boost enterprise and reform the tax system to make it "fairer."

Plans to cut six billion pounds from non-frontline public services this financial year will be outlined next Monday, he said.

The "great majority" of the savings would be used to start paying down the deficit of 163.4 billion pounds, Osborne said.

"The Treasury's assessment is that there is a strong economic case for an immediate spending reduction of six billion pounds. So we are in no doubt that this action is advisable," he said.

"By tackling wasteful spending now rather than later, we can demonstrate our commitment to tackling the deficit."

© 2010 AFP

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