With opinion polls indicating something of a deadlock between the Conservative and Labour parties in the U.K., all eyes will be on Westminster today, as the Chancellor of the Exchequer, George Osborne, unveils the government’s final budget announcement before the General Election in May.
Today we set out the next stage in a plan that is working, with a Budget that works for you. We will deliver a truly national recovery
— George Osborne (@George_Osborne) March 18, 2015
The current U.K government – a coalition between the Conservative and Liberal Democrat parties – has faced vehement criticism over what has been perceived as the implementation of extreme economic policies, leading to a widening in the divide between the wealthy and the poor. As The Guardian explains, the combination of taxes and cuts to public services – in particular the NHS – have been characterised by the Labour party as, essentially, an assault on the those with lower incomes. However, in today’s budget announcement, Osborne is expected to specifically target older voters with reforms to pensions – implementing new rules allowing pensioners to cash in annuities.
With the housing shortage continuing, Osborne is also expected to reach out to young, would-be home-buyers with measures to increase house-building. In addition, today’s budget announcement is expected to indicate a speeding-up of the government’s programme to connect more homes to high-speed internet facilities, as well as giving focus to Osborne’s previously discussed ‘Northern Powerhouse’ strategy – connecting other regions of the U.K. with the influential south-east area. Voters are likely to remain focused on the economic divide, however, so some ‘crowd-pleasing’ economic policies are inevitable. These are expected to include measures to prevent corporate tax evasion, a small reduction in beer duty – making the price of a pint slightly more affordable – and a possible further increase to tax-free personal allowance.
As outlined by BBC News, the U.K. economy has seen a £6 billion windfall due to levels of inflation being lower than expected – largely due to the significant drop in oil prices. This gives the Chancellor and his team additional funds to work with, and voters will be watching to see where the government’s priorities lie based upon which areas of the budget benefit from that windfall.
While the Chancellor and his coalition colleagues are attempting to manage expectations by repeating the fact that there will be “no giveaways” and “no gimmicks” in today’s budget, the fact that the General Election is now less than two months away is considered to almost guarantee a less austere budget than has previously been seen from this government. Economic and political observers suggest that it will be the tax elements of the budget that will have the biggest impact on the outcome of the General Election with regard to the Conservative party, however. The Telegraph in particular highlights the fact that a lasting impression of the Conservative party being biased toward the wealthy is likely to be vastly detrimental to its 2015 election campaign.
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