UK Chancellor unveils emergency budget to cut record debts

08:04, June 23, 2010      

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UK Chancellor of the Exchequer George Osborne said Tuesday the coalition government would cut spending to ensure debt would fall as a percentage of GDP by fiscal year 2015-16.

Unveiling the first budget of the new government, Osborne said it would deal decisively with the record government debt.

He told Parliament that compared with the plans set out by Labour, the Conservative/Liberal Democrats government would cut additional current expenditure by 30 billion pounds (44 billion U.S. dollars) a year by 2014-15.

Osborne said he planned to "over-achieve" his target of balancing the structural current deficit by 2015-16.

"In this parliament, we will ensure that debt is falling as a percentage of GDP by 2015-16," he said.

The state now accounted for "almost half" of all national income, which was "completely unsustainable," the finance minister said.

Osborne said Britain's current expenditure would rise from 637 billion pounds (944 billion dollars) in fiscal year 2010-11 to 711 billion pounds (1,053 billion dollars) in 2015-16, blaming a "rapidly rising bill for debt interest."

The UK's public deficit currently stands at 155 billion pounds (230 billion dollars), second only to Ireland's debt among European countries.

The UK's national debt amounted to 903 billion pounds (1,339 billion dollars), or 62.2 percent of GDP, the highest since 1993.

Last week, Britain's newly established Office for Budget Responsibility (OBR) cut the economic growth forecast for 2011 to 2.6 percent, down from the 3.25 percent estimated by the former Labour government.

Source: Xinhua


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