LONDON (Reuters) - Britain’s finance minister Alistair Darling promised on Sunday no giveaways in this week’s budget, seeking to present his ruling Labour Party as a safe pair of hands on the economy as an election nears.
With opinion polls indicating no clear winner when Britons vote in an election expected on May 6, Labour and the opposition Conservatives want to show they are best placed to deal with the key issue -- Britain’s record budget deficit.
Markets have speculated Labour, trailing in the polls, would be tempted to splash some cash in Wednesday’s budget to woo voters because full-year government borrowing could undershoot forecasts by as much as 10 billion pounds ($15.20 billion).
But Darling ruled out election sweeteners, saying he wanted a budget focused on future growth and jobs.
“There’s no question of giveaways,” Darling said in an interview with BBC television. “I think the mood of people just now is they want to see a sensible, workmanlike budget, a budget for the times in which we live.”
Britain is borrowing about 170 billion pounds this year or 12 percent of gross domestic product -- comparable to crisis-hit Greece.
The Conservatives want to start cutting the deficit this year, saying fast action was needed to reduce borrowing or Britain’s coveted triple-A credit rating could be at risk.
The party’s Treasury spokesman Philip Hammond said the budget was likely to be little more than “window dressing.”
“We have got to make a start in 2010 because a plan that says we’ll start next year is not a credible plan in the eyes of many observers,” he told BBC TV.
However, Labour’s four-year plan to halve the budget deficit through a mixture of growth returning to the economy, higher taxes and lower spending appears to be playing well with voters, leading to improved ratings in opinion polls.
Two polls on Sunday, however, still showed the center-right Conservative Party 6 or 7 points ahead of Prime Minister Gordon Brown’s Labour, which has been in power for 13 years, making it the biggest party in parliament but lacking an overall majority.
That could leave the smaller opposition Liberal Democrats as kingmakers with either the Conservatives or Labour needing their support to pass laws.
Financial markets fear a minority or coalition government would not take the strong action investors want on the deficit.
In an interview with the Observer newspaper published on Sunday, Lib Dem finance spokesman Vince Cable said he had held talks with the Treasury’s top civil servant to discuss his party’s economic policies in the event of a hung parliament.
“He wanted to know what we attached priority to. He wanted to know what we felt strongly about,” Cable told the paper.
The economy is taking center stage in campaigning as commentators say voters struggle to see major differences between the parties on many other issues.
A TV debate between the Labour and Conservative foreign affairs spokesmen on Sunday showed little difference on policies from dealing with Iran to the war in Afghanistan, with only Britain’s role in Europe a significant area of division.
Reporting by Michael Holden; Editing by Janet Lawrence
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