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| George Osborne Offers Tax Breaks to British Voters in Budget Statement | George Osborne Offers Tax Breaks to British Voters in Budget Statement |
| (35 minutes later) | |
| LONDON — With British elections approaching, George Osborne, the chancellor of the Exchequer, used a budget statement on Wednesday to claim credit for the economic recovery and to offer some relief to hard-pressed voters. | LONDON — With British elections approaching, George Osborne, the chancellor of the Exchequer, used a budget statement on Wednesday to claim credit for the economic recovery and to offer some relief to hard-pressed voters. |
| With an upturn in tax receipts and a dip in inflation prompted by a fall in oil prices, Mr. Osborne outlined a range of breaks, including measures for savers, first-time home buyers, beer drinkers and companies extracting oil from the North Sea. | With an upturn in tax receipts and a dip in inflation prompted by a fall in oil prices, Mr. Osborne outlined a range of breaks, including measures for savers, first-time home buyers, beer drinkers and companies extracting oil from the North Sea. |
| His statement to Parliament outlining spending plans, a little more than seven weeks before elections on May 7, gave the governing Conservative Party a chance to outline its main policies to voters. | His statement to Parliament outlining spending plans, a little more than seven weeks before elections on May 7, gave the governing Conservative Party a chance to outline its main policies to voters. |
| Mr. Osborne argued that his cuts in public spending had laid the foundations for an economic rebound in Britain — one that would be put at risk if voters were to elect the opposition Labour Party, which was in power at the time of the financial crisis. The economy grew 2.6 percent in 2014. | Mr. Osborne argued that his cuts in public spending had laid the foundations for an economic rebound in Britain — one that would be put at risk if voters were to elect the opposition Labour Party, which was in power at the time of the financial crisis. The economy grew 2.6 percent in 2014. |
| “Britain is growing, creating jobs and paying its way,” Mr. Osborne said, adding that the country was “walking tall again.” His plans represented “one more step on the road from austerity to prosperity,” he said, describing Britain as the “comeback country” and saying it could eclipse Germany, economically, within 15 years. | “Britain is growing, creating jobs and paying its way,” Mr. Osborne said, adding that the country was “walking tall again.” His plans represented “one more step on the road from austerity to prosperity,” he said, describing Britain as the “comeback country” and saying it could eclipse Germany, economically, within 15 years. |
| “In the last year, we have grown faster than any other major advanced economy in the world,” Mr. Osborne told lawmakers. | “In the last year, we have grown faster than any other major advanced economy in the world,” Mr. Osborne told lawmakers. |
| In an effort to help spread the benefits of recovery, Mr. Osborne announced an increase in the amount that workers can earn before paying income tax, to 11,000 pounds, or about $16,300, from £10,600, by 2017-18. Investors will be able to earn up to £1,000 in interest without having to pay tax on it, he added. | In an effort to help spread the benefits of recovery, Mr. Osborne announced an increase in the amount that workers can earn before paying income tax, to 11,000 pounds, or about $16,300, from £10,600, by 2017-18. Investors will be able to earn up to £1,000 in interest without having to pay tax on it, he added. |
| Increased taxes on the banking sector would raise £5.3 billion, he said; by contrast, Mr. Osborne announced tax breaks worth £1.3 billion for companies extracting oil from the North Sea. They have complained bitterly about the effect of falling energy prices. | Increased taxes on the banking sector would raise £5.3 billion, he said; by contrast, Mr. Osborne announced tax breaks worth £1.3 billion for companies extracting oil from the North Sea. They have complained bitterly about the effect of falling energy prices. |
| Forecasts released by the independent Office for Budget Responsibility in Britain upgraded growth forecasts to 2.5 percent in 2015, and to 2.3 percent for each of the next three years. | Forecasts released by the independent Office for Budget Responsibility in Britain upgraded growth forecasts to 2.5 percent in 2015, and to 2.3 percent for each of the next three years. |
| The opposition Labour Party argues that living standards for most Britons have not improved, that few normal voters are benefiting from the recovery, and that another Conservative government will make further deep cuts to public spending. Its leader, Ed Miliband, described the announcement as “the budget that cannot be believed,” and argued that taxes would rise and that spending cuts would be “massive” if the Conservatives were returned to power. | |
| Behind the rosy picture on growth, there are some problems. The country’s budget deficit of 5.5 percent of gross domestic product is high, as is borrowing. At the same time, low productivity remains a constant, disappointing feature of the British economy. | Behind the rosy picture on growth, there are some problems. The country’s budget deficit of 5.5 percent of gross domestic product is high, as is borrowing. At the same time, low productivity remains a constant, disappointing feature of the British economy. |
| When the economy failed to grow as expected early in his tenure, Mr. Osborne was forced to rethink his deficit-reduction targets and to temper his austerity policies. However, he has promised more spending reductions if the Conservatives win the election. | When the economy failed to grow as expected early in his tenure, Mr. Osborne was forced to rethink his deficit-reduction targets and to temper his austerity policies. However, he has promised more spending reductions if the Conservatives win the election. |
| In a pre-budget analysis, Robert Wood, chief Britain economist for Berenberg Bank, predicted small changes. “The Conservative Party campaign is laser-focused on the economy, on ‘competence versus chaos,’ as its slogan puts it,” he wrote. “It can hardly spray cash around with abandon while also arguing that voters should return a Conservative government because the fiscal job remains unfinished.” | In a pre-budget analysis, Robert Wood, chief Britain economist for Berenberg Bank, predicted small changes. “The Conservative Party campaign is laser-focused on the economy, on ‘competence versus chaos,’ as its slogan puts it,” he wrote. “It can hardly spray cash around with abandon while also arguing that voters should return a Conservative government because the fiscal job remains unfinished.” |
| “The room for chunky tax cuts is fictional anyway,” he added. “It should be emphasized that the government budget deficit is currently running at £90 billion a year.” | |
| Mr. Osborne’s announcements included a penny off the tax on a pint of beer, a 2 percent reduction of the tax on spirits and most ciders, and a freeze on the tax on wine. Taxes on gasoline would also be frozen, he said. | Mr. Osborne’s announcements included a penny off the tax on a pint of beer, a 2 percent reduction of the tax on spirits and most ciders, and a freeze on the tax on wine. Taxes on gasoline would also be frozen, he said. |
| Mr. Osborne promised that the annual paper tax return would be replaced by digital tax accounts, which are devised to be easier to complete. A new plan would be created to help people save for the deposit on their first home, he added. | |
| Before the statement to Parliament on Wednesday, Mr. Osborne had announced plans to change the system for pensions, a politically delicate area of policy because retirees are, statistically, more likely to vote than young people. | Before the statement to Parliament on Wednesday, Mr. Osborne had announced plans to change the system for pensions, a politically delicate area of policy because retirees are, statistically, more likely to vote than young people. |
| Last year, he scrapped rules that would have forced those who are retiring to convert pension savings into annuities, which guarantee a cash income for life. | |
| This year, Mr. Osborne said he would allow those who already had annuities to sell them without facing large tax bills, as they do now. | |
| Mr. Osborne also confirmed on Wednesday the introduction of a new 12-sided pound coin. | Mr. Osborne also confirmed on Wednesday the introduction of a new 12-sided pound coin. |