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British finance minister to announce big spending cuts

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(Globalpost/GlobalPost)

Finance minister George Osborne will on Wednesday confirm plans to further slash Britain's state spending, with the government insistent on sticking to a path of austerity despite a fragile economic recovery.

Osborne, Britain's Chancellor of the Exchequer, will outline details of cuts to spending totalling £11.5 billion ($17.7 billion, 13.6 billion euros) for the country's 2015-16 financial year, which follows Britain's next general election in two years' time.

He was to present details of the cuts in a speech to parliament at 1130 GMT.

Osborne on Sunday said that although the British economy was "out of intensive care," the Conservative-Liberal Democrat coalition government would not steer away from deep austerity in a bid to slash its huge public deficit.

Osborne's spending plans come after he finalised budget agreements with government ministries last week.

The Ministry of Defence reached a deal after being assured that, despite further civilian job cuts, there would be no reduction in troop numbers, Osborne revealed on Sunday.

Osborne, who belongs to Prime Minister David Cameron's Conservative party, was also set to announce plans to use the savings to invest in education, science, roads and railways -- which do not form part of the government's day-to-day spend.

The main opposition Labour Party has said that it would likely stick to Osborne's plans on day-to-day spending should it win re-election at the national polls in 2015.

Britain's economy returned to growth in the first quarter of this year, with gross domestic product expansion of 0.3 percent according to the latest official data. In doing so, the country avoided its third recession since the 2008 global financial crisis.

The International Monetary Fund however last month declared that Britain was "a long way" from a sustainable economic recovery.

In a gloomy report, the IMF called for the government to boost infrastructure spending to accelerate economic growth and offset state austerity. Labour has also insisted on such a wave of action.

Osborne insists that the government's austerity measures are needed to drive down the record budget deficit inherited from the previous Labour administration in 2010.

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http://www.globalpost.com/dispatch/news/afp/130626/british-finance-minister-announce-big-spending-cuts