UK makes sharpest cuts in decades in new budget

By: Associated Press Email
By: Associated Press Email

LONDON (AP) - Britain's Treasury Chief George Osborne has announced the toughest cuts to public spending in decades and new tax rises in an emergency budget aimed at sharply reducing the country's record debts.

The government is hitting consumers with a rise in the broad-based tax on sales and services from 17.5 percent to 20 percent next year.

Osborne also announced Tuesday that he would impose a levy on banks to raise 2 billion pounds ($3 billion) a year, cut most government departments' budgets by 25 percent and even got an agreement from Queen Elizabeth II to accept a freeze on her support from taxpayers.

Unusually, Osborne announced no increase in taxes on alcohol, tobacco and fuel, and he repealed a high tax on cider.

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