LONDON (Reuters) - There will be no pre-election giveaways in Wednesday’s budget, British finance minister Alistair Darling said on Sunday, promising instead a “sensible, workmanlike” economic plan to support growth and cut borrowing.
Markets have speculated Labour, facing possible defeat in an election expected on May 6, would be tempted to splash some cash to woo voters because full-year government borrowing could undershoot forecasts by as much as 10 billion pounds ($15.20 billion).
In a more ordinary year that would be possible, but Britain is borrowing about 170 billion pounds this year or 12 percent of gross domestic product -- comparable to crisis-hit Greece.
“There’s no question of giveaways,” Darling said in an interview with BBC television. “I don’t think the mood of the time is for giveaways.”
Darling indicated there would be some small investments in greener, future growth industries and he is also expected to use some money to support the labour market but that may only amount to a few billion pounds.
The rest is likely to be banked because a lower borrowing profile than expected this year does not guarantee a similar result in years to come.
Darling is expected to stick to the thrust of his economic forecasts made in December, re-emphasising his four-year plan to halve the budget deficit through a mixture of growth returning to the economy, higher taxes and lower spending.
The opposition Conservatives, who could end Labour’s 13-year grip on power this year, say the government’s plans are inadequate and Britain’s coveted triple-A credit rating could be at risk unless more is done and sooner to reduce borrowing.
The centre-right opposition want to start cutting this year but have yet to give many details on how they could achieve that. Darling says deficit cuts should wait until 2011 because the economy is still frail after an 18-month recession.
“It will be a budget focused on growth,” he said.
Opposition Treasury spokesman Philip Hammond said the budget was likely to be little more than “window dressing” given the proximity of an election.
The Conservatives have promised to deliver an emergency budget within 50 days of taking office if they win the election.
Reporting by Michael Holden and Matt Falloon; Editing by Hans Peters
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