UK's Osborne defends budget restraint

British Chancellor of the Exchequer George Osborne told the House of Commons Tuesday that he had made mistakes in his draft budget, but defended his overall strategy of cutting spending to consolidate the nation's finances.

"Where we have made a mistake, where we have got things wrong, we listen and we learn," he said, referring to a previous plan to curtail benefits for the disabled and long-term sick. That plan led to the resignation of Secretary of Work and Pensions Iain Duncan Smith and the government's subsequent scrapping of the scheme.

But despite the turmoil his proposals has caused, George Osborne made a staunch defense of the principles behind spending cuts in other areas.

"Let's be clear, if we're going to deliver a strong and compassionate society for the next generation, we have to live within our means," Osborne told his critics.

Warning signals

The finance minister has come under increasing pressure after data was released showing he was on the verge of missing his target to reduce the deficit for the current financial year.

Ratings agency Moody's had said Britain's triple-A rating for creditworthiness would be pressured by the marked slowdown in fiscal consolidation.

It was not immediately clear how the gap in the figures caused by the reversal on welfare cuts would be plugged. Opposition leaders have demanded a higher tax on the income of top-earners.

Osborne quipped it was "a classic socialist illusion to think you can solve all of society's problems with taxes on the very richest."

hg/jtm (Reuters, AFP)