George Osborne should be replaced as Britain’s chancellor of the exchequer, almost half of those questioned in a poll said, with a similar number urging him to ease his austerity program as the economy struggles to grow.
The poll by ComRes Ltd. for ITV News showed 44 percent of voters want Osborne, who announces his annual budget today, to be removed, while 18 percent said he should stay in his job. ComRes found that 41 percent of respondents said he should borrow more money to spend on infrastructure, while 61 percent said the economy is heading back into recession.
Osborne outlined further cuts to departmental spending to fund extra capital investment yesterday to the Cabinet, a day before his statement at 12:30 p.m. to Parliament in London. He has vowed to stick to his austerity plans. Even amid the new spending reductions, criticism from ministers has been muted, suggesting Osborne may have found money to fund a tax cut in today’s announcement.
“The government insists it is sticking to fiscal responsibility and monetary activism, but this does not preclude some modest tax cuts and investment spending,” said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London.
Investors are losing confidence in the coalition government’s plans as the economic slump lingers. Gross domestic product fell 0.3 percent in the fourth quarter of 2012 and a contraction this quarter would mark an unprecedented triple-dip recession.
The Labour Party’s Treasury spokesman, lawmaker Ed Balls, told BBC television on March 17 Osborne should cut value-added tax, reduce National Insurance (ANAT) contributions for small companies and reintroduce a 10 percent starting rate of income tax, compared with the current 20 percent basic rate.
“First of all, we would be seeking to boost demand,” Labour’s business spokesman, Chuka Umunna, told Bloomberg Television’s Guy Johnson this morning. He said cutting VAT to 17.5 percent from 20 percent would be “the quickest way -- actually, even quicker than giving an income-tax cut -- of getting money into the economy.”
While such a step would incur “a bit of short-term borrowing,” increased, growth, employment and tax receipts would compensate in the longer term, Umunna said.
The poll showed that 54 percent of voters said the way Osborne is reducing the budget is unfair and 56 percent said he is cutting too much and too quickly. ComRes interviewed 2,032 adults online from March 15 to March 17. It didn’t specify a margin of error.
Government departments’ current spending will be reduced by 1 percent a year in the three years starting in April 2013, Prime Minister David Cameron’s spokesman, Jean-Christophe Gray, told reporters in London yesterday. The effort will raise 2.5 billion pounds ($3.8 billion) over two years, which will go into capital projects to be announced by Osborne in Parliament today.
Osborne will have at his disposal 2.2 billion pounds from bringing forward by a year to 2016 plans for a flat-rate state pension. The chancellor will outline how he will use that money in his statement to lawmakers.
Liberal Democrats in the coalition government such as Business Secretary Vince Cable have been urging more spending on infrastructure, while some in Cameron’s and Osborne’s Conservative Party have called for a tighter squeeze on spending.
Calls for greater action to aid growth from both Tories and Liberal Democrats have subsided in recent days, suggesting Osborne’s budget will include measures to appease critics such as Cable.
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