According to Chancellor George Osborne, whether the government will be capable of delivering tax cuts by the next election in 2015 will rely on economic developments during the next few years, particularly relating to the reduction of the deficit.
With economic growth being slower than expected because of the global financial crisis, Osborne’s timeline predictions for reducing the nation’s deficit could be significantly delayed, making it difficult for the government to deliver previously proposed tax cuts.When Osborne was asked whether he believes the tax cuts will be implemented in the current session of Parliament, he stated that although he supports the principle of the tax cuts, none are currently on an official agenda.
While the Chancellor believes that taxes should be lowered to stimulate the economy and promote enterprising, he also made it known that the record budget deficit (which recently topped 10% of the national output) is currently the government’s top priority.While Chancellor is adamant about the fact that he wants to lower taxes, he also has made it clear that he does not want to have to borrow money in order to do so.
Furthermore, he also does not want to have to raise taxes just one year after cutting them in order to fight off an increasing deficit. With the mentality that tax cuts should last for at least several decades, Osborne is hesitant to promise any tax cuts that could impede the reduction of the deficit and wind up being reversed soon after.
Ultimately, Osborne believes that predicting the timeline of future tax cuts is not a priority during this autumn’s Parliament, as there are other more urgent economic issues to deal with (i.e. – the euro zone crisis and the global financial crisis).
