Chancellor George Osborne is set to announce a cap on more than £100m of welfare spending in today’s Budget in an attempt to set a “political trap” for Labour in the next election, the Financial Times reports.
According to the paper, Mr Osborne will use new official forecasts to argue that economic growth is not eroding the underlying deficit and that more cuts will be needed in the next parliament.
The cap will be in line with official forecasts for welfare spending but will require a future chancellor to cut benefits or seek parliamentary approval if spending rises above the cap, the paper reports.
The Budget will also focus on technical supply-side reforms in order to boost manuracturing, exports, regional development and skills.
Carney joins Osborne in economic warnings
Mr Osborne and Bank of England governor Mark Carney have each warned that difficult decisions lie ahead if the country is to achieve its goal of a secure, fully-recovered economy, the Guardian reports.
The chancellor is expected to say he is only halfway through the economic programme begun in 2010.
Mr Carney meanwhile said it “did not take a genius” to see that a long period of low interest rates created risks similar to those that led Britain into its deepest post-war depressions, and that the BoE must focus on more than just keeping inflation low, which he dubbed a “dangerous distraction”.
Pound coin ousted by two-metal dodecagon
The traditional British pound coin will be replaced by a two-metal, 12-sided version which is more difficult to fake, the Independent reports.
According to the paper, Mr Osborne is set to officially unveil the new coin in his Budget today.
The new coin is modelled on the “threepenny bit” which was withdrawn when the currency was decimalised in 1971.
The Independent estimates that 45 million of the £1 coins currently in circulation are forgeries, making up three per cent of the total.
Narrowing ‘output gap’ could mean more cuts
Mr Osborne will today reveal that the “output gap” - the difference between actual and potential economic activity - has narrowed, the Telegraph reports.
However, the paper warned that although this is a good sign for the economy, it leaves little room for growth and tax to replace borrowing. This could mean that the chancellor must find more spending cuts and austerity measures to meet his goal of a balanced Budget by 2018-19.
