UK Budget 2010 declared: Deficits, tax hikes with all details
UK unveiled its emergency budget today, June 22, becoming the latest standard-bearer for a grim reality that is uniting nations across the Continent.
UK UNVEILED its emergency budget today, June 22, becoming the latest standard-bearer for a grim reality that is uniting nations across the Continent.In a bid to protect the poorest of Britons, the chancellor announced an array of measures that will still pinch pockets: a two-year freeze on public sector pay for those earning more than £21,000; a 2.5-percent rise in the VAT, to 20 percent; and a three-year freeze on child benefits.Tax hikes on higher-income earners' income from 18 percent to 28 percent, and the threshold for higher-rate income tax will be frozen until 2013.
"Today we take decisive action to deal with the debts we inherited and confront the greatest economic risk facing our country," Chancellor Osborne said today. Britain's deficit is a legacy of a spending boom that delivered new schools, hospitals, and roads before ending in 2008. It stands at more than 11 percent of gross domestic product (GDP). But critics claim that Osborne risks choking off Britain's fragile economic recovery by cutting too much too fast. Others fret about export-led growth potential if Britain and other European states all reduce spending simultaneously. Germany, he says, is uniquely placed to make other European states' problems "a lot easier" by spending more rather than cutting back. "When they all start contracting at the same time, they are all going to find themselves back in the same place, but a lot poorer." Canada and Sweden in the 1990s are held up as models of developed countries who successfully tackled deficits.
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