UK slashes spending, raises VAT and taxes banks

09:25, June 23, 2010      

Email | Print | Subscribe | Comments | Forum 

British finance minister George Osborne Tuesday produced the harshest budget in a generation, slashing spending, raising taxes and slapping a levy on banks in a drive to cut a record budget deficit to almost nothing in five years.

Osborne said government spending would fall by around 25 percent over four years and announced VAT sales tax would go up to 20 percent from 17.5 next year, with a new 2 billion pound ($3 billion) levy on banks introduced at the same time.

Nearly a million of the poorest-paid people will be taken out of the income tax net altogether by raising its starting point, while the headline rate of corporation tax will drop by one percentage point to 27 percent next year and then keep falling.

"It will affect me quite strongly," a sales assistant named Jackie at WHSmith, one of UK's leading retail groups, told the Global Times. Jackie said although the government will not tax her as she is "earning the minimum pay," she will pay more for goods with the rising VAT.

Osborne said just over three-quarters of the tightening would come from spending cuts and the rest from tax raises. Welfare payments, including child and housing benefits would be targeted and even the expenditure of Britain's royal family will be subject to closer scrutiny.

"When we say that we are all in this together, we mean it," Osborne told parliament.

"This cutting will freak out everybody," Sarha Edmonds, a healthcare nurse living in London, told the Global Times. She received child benefit for her first child but now she is pregnant again. "My new baby will not get any benefit."

"And I've got a mortgage, it's going to be tough," she added.

According to The Guardian, nearly three-quarters of voters believe the government's priority should be to cut spending, rather than increase taxes.

In addition, Britain, France and Germany have agreed to introduce levies on banks to make them help pay for global recovery, they said in a joint statement Tuesday as Osborne said it would come into effect at the start of 2011.

Source: Global Times

(Editor:黄蓓蓓)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • A man visits "Thy Word Is Truth, the Bible Ministry Exhibition of the Protestant Church in China", during its opening at Mount Vernon Place United Methodist Church in Washington DC, capital of the United States, Sept. 28, 2011. Through the Bible's various Chinese versions, ancient or modern, as well as pictures, paintings, calligraphy, art works and historical documents, the exhibition was expected to give an overall understanding of how Bible was brought into China, how it was translated, published, distributed and loved. (Xinhua/Zhang Jun)
  • A visitor passes by in the exhibition of Istanbul design week on Sept. 28, 2011 in Istanbul, Turkey. Istanbul design week will be hosting designers and design exhibitions from around the world in Istanbul from Sept 28 to Oct 2 with the participation of 25 countries. (Xinhua/Ma yan)
  • Red flag flies at the Jiuquan Satellite Launch Center in northwest China's Gansu Province, Sept. 28, 2011. A spokesperson with China's manned space program said Wednesday that fuel has been injected into the Long March-2FT1 carrier rocket in preparation for launching the Tiangong-1 space module Thursday evening as planned. (Xinhua/Wang Jianmin)
  • A militant loyal to the Libyan National Transitional Council (NTC) waves in a tank near Bani Walid, one of the pro-Muammar Gaddafi strongholds, on Sept. 28, 2011. (Xinhua/Hamza Turkia)
  • Jewish worshippers pray at the Western Wall, Judaism's holiest prayer site, in Jerusalem's Old City on Sept. 28, 2011, ahead of Rosh Hashanah, the two-day Jewish new year which will begin at sunset on Sept. 28 and conclude at nightfall on Sept. 30. (Xinhua/Muammar Awad)
  • High school student Johanna Choapa is helped by her father after announcing the end of hunger strike in Santiago, capital of Chile, on Sept. 28, 2011. The end of the strike took place to make way for a dialogue with the government, seeking to resolve the four-month crisis in the education sector. (Xinhua/Jorge Villegas)
Hot Forum Discussion