Osborne says will miss short-term budget goals, cuts property tax

Wed Dec 3, 2014 11:45am EST
 
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By William Schomberg, William James and David Milliken

LONDON (Reuters) - British finance minister George Osborne said on Wednesday he would miss his short-term budget deficit targets but could afford tax cuts for most home-buyers, offering some relief to voters from his austerity push before elections.

Osborne stuck to his plan for further spending cuts to put Britain's budget back in the black before the end of the decade, hoping that his purge of the public finances will return him and Prime Minister David Cameron to power in May.

He also announced a fresh crackdown on corporate tax avoidance, saying multinationals which artificially move profits abroad would be hit with a 25 percent tax and banks would be able to claim fewer tax breaks for losses dating back to the financial crisis. Bank shares fell.

In this, Osborne was taking aim at political ground held by the opposition Labour party, which claims the Conservative-led coalition favours the rich.

Britain finally began to recover from the financial crisis in mid-2013. But growth has not yet brought big pay rises for workers or higher income tax receipts for the government.

Osborne said Britain's deficit would be bigger than previously expected in the current financial year and in 2015/16 before improving after that and going into surplus in 2018/19.

"Out of the red and into the black for the first time in a generation -- a country that inspires confidence around the world because it seeks to live within its means," he said as he gave parliament an update on the economy and public finances.

Britain's independent budget office underscored the size of the squeeze still ahead. It said Osborne's plans would take public spending as a share of the economy to its lowest level in 80 years.   Continued...

 
Britain's Chancellor of the Exchequer George Osborne (L) and Chief Secretary to the Treasury Danny Alexander leave the Treasury to present the Autumn Statement to Parliament in London December 3, 2014. REUTERS/Alastair Grant/pool