Britain’s Chancellor George Osborne acknowledges that the country has run out of the much-needed money and cannot afford debt-fuelled tax cuts or extra spending.
The Chancellor made the stark warning ahead of next month’s budget, noting that “there was little the coalition government could do to stimulate the economy”, British media reported.
“The British government has run out of money because all the money was spent in the good years,” the Chancellor said adding “the money and the investment and the jobs need to come from the private sector.”
Osborne’s bleak assessment echoes that of Liam Byrne, the former chief secretary to the Treasury, who bluntly joked that Labour had left Britain broke when he exited the government in 2010.
Osborne is under severe pressure to boost growth, amid signs the economy is slipping back into a recession.
The Institute of Fiscal Studies has urged him to consider emergency tax cuts in the budget to reduce the risk of a prolonged economic slump.
But, the Chancellor has said he would stand firm on his effort to balance the books by refusing to borrow money.
“Any tax cut would have to be paid for,” Osborne said. “In other words there would have to be a tax rise somewhere else or a spending reduction.
“In other words what we are not going to do in this Budget is borrow more money to either increase spending or cut taxes”, added Osborne.
The Chancellor’s tough words were echoed by Liberal Democrat Jeremy Browne, the foreign minister, who warned that Britain faced “accelerated decline” without measures to tackle its debt and increase competitiveness.
“Britain’s market share in the world used to be dominant but was now in freefall compared with the soaring economies of Asia and South America. This situation has been becoming more acute for years.
It is now staring us in the face. So we need to take action”, he wrote in an article published by The Daily Telegraph.