LONDON (AP) – Britain’s Treasury chief will set out Wednesday the Conservative-led government’s spending plans ahead of next year’s election, trumpeting encouraging growth figures in one of the final economic statements before the vote.
George Osborne is likely to play down his failure to eliminate the budget deficit and emphasize growth as he outlines his policies in the so-called Autumn Statement. The statement is a showpiece of political theater – and a good moment to highlight successes in Europe’s third- largest economy.
Experts are predicting that the Office of Budget responsibility will raise its prediction for U.K. growth this year to over 3 percent, making it one of the fastest growing economies in the developed world.
“I’ll set out how we will secure the economy & stay on course to prosperity,” Osborne tweeted ahead of the announcement.
Despite cuts and austerity programs, the government has had less success in bringing down the deficit – one of Osborne’s key promises before the end of Parliament’s term next year. That’s because many of the jobs that have been created are low-wage jobs where workers don’t pay much income tax.
Falling oil revenues are also hurting Osborne’s efforts to bring the deficit under control. The U.K. is an energy-producing nation, so falling oil prices reduce the revenue the government gets from North Sea oil and gas production, especially since production is likely to decline.
The statement is expected to deliver on funding for road projects – including a tunnel under Stonehenge. He is also likely to offer funding to bolster flood defenses.
Osborne also promised to repay debt that Britain has carried since World War I but does not carry a fixed repayment date. He says the government will take advantage of low interest rates to repay it in full.