British Chancellor of the Exchequer George Osborne will claim the British economy is “leaving intensive care” when he unveils a fresh round of spending cuts, media reports said yesterday.
The finance minister, who will deliver his spending review on Wednesday, is expected to spell out ￡11.5 billion (US$17.7 billion) of cuts to government ministries following the planned May 2015 general election.
Besides the spending reductions, Osborne is set to announce plans to use the savings to invest in education, science, roads and railways in a bid to “power Britain back into the economic premier league.”
“Britain is moving from rescue to recovery, but while the British economy is leaving intensive care, now we need to secure that recovery,” Osborne will tell parliament, according to extracts appearing in reports yesterday.
“Full recovery won’t be easy, but I won’t let up in my determination to put right what went so badly wrong,” he will tell parliament.
“We are already making progress: The economy is growing, more than a million new jobs have been created by British businesses and the amount the government has to borrow each year — the deficit — is down by one third,” he will say. “But there’s more we have to do — it’s time for the next stage of our economic plan.”
Osborne has come under pressure to invest in capital projects to help the fragile recovery and he will give details of “a long-term infrastructure plan.”
“We’re saving money on welfare and waste to invest in the roads and railways, schooling and science our economy needs to succeed in the future,” he will say.
Britain borrowed less than expected last month owing to one-off factors, official data showed on Friday, boosting Osborne ahead of the spending review.
Public sector net borrowing, a measure of the public deficit, stood at ￡8.8 billion last month, the Office for National Statistics said in a statement.
In a speech on Saturday, opposition Labour Party leader Ed Miliband announced that he would not be able to reverse any of Osborne’s cuts in day-to-day spending unless they were fully funded from savings elsewhere or extra revenue — not from more borrowing.
Labour finance spokesman Ed Balls urged Osborne to pump money into the economy now to reduce the need for cuts in two years’ time.
“More growth now would bring in more tax revenues and mean our public services would not face such deep cuts in 2015,” he wrote in the Sunday Mirror newspaper.