UK Budget 2012

March 21, 2012 by staff 

UK Budget 2012, British finance minister George Osborne cut the top rate of income tax while imposing new levies on the wealthy, in a political high wire act designed to rejig the burden of austerity without wavering on plans to erase a huge budget deficit.

Britain should avoid a renewed recession and while the recovery was set to remain modest this year, growth should pick up thereafter, Osborne told parliament in his annual budget statement on Wednesday.

A sometimes uneasy coalition government of centre-right Conservatives and more left-wing Liberal Democrats has made erasing a huge budget deficit – which topped 11 percent of GDP before it took office – within the next five years its core objective, and the latest forecasts showed it remained on track.

With no money left to boost an economy that has not fully recovered from a slump caused by the 2007-2009 global crisis, Osborne focused on a flurry of tax measures, some of which represent a major political gamble.

In a move that will please his own Conservative party, he cut a 50 percent income tax band for the highest earners to 45 percent, from next year on. The Conservatives say that high a levy is a barrier to aspiration and entrepreneurship. The Labour opposition say it is a fair way to spread the pain.

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