GEORGE Osborne will today deliver his fourth Budget to the House of Commons and unveil a series of major building schemes designed to kickstart economic growth.
Whitehall spending will be slashed by a further £2.5bn over the next two years, with the money redirected towards “shovel ready” infrastructure projects such as road building and housing.
But Osborne’s announcement is expected to be accompanied by a double dose of bad economic news. The independent Office for Budget Responsibility is set to cut the UK’s growth forecast and confirm that the government has borrowed up to £8bn more than planned over the last year.
The chancellor told ministers at yesterday’s cabinet meeting that most government departments will have to cut their spending by one per cent in each of the next two years in order to fund his capital spending plans.
The NHS, schools, overseas aid, and HM Revenue & Customs budgets will be unaffected, leaving other departments to bear the brunt of the cuts, which come on top of previously announced reductions to spending.
The government has already announced some policies ahead of the Budget, including tax allowances for childcare, the early introduction of the new state pension and a crackdown on tax avoidance by people who funnel their wages through off-shore bank accounts.