GEORGE Osborne faces a tough job when he produces his Budget tomorrow.
But anyone hoping the Chancellor will reverse the Government’s controversial austerity programme looks set to be disappointed.
Mr Osborne told BBC1’s Andrew Marr Show that ditching his plan to restore the nation’s finances could leave the UK facing an economic disaster like Cyprus.
He rejected calls for a change in approach ahead, saying there was no “miracle cure” to the country’s troubles.
The Chancellor said the crisis in Cyprus was an example of “what happens if you don’t show the world you can pay your way.”
“That is why, in Britain, we have got to retain the confidence of world markets,” he added.
The Cypriot parliament is set to consider a European Union and International Monetary Fund bailout, with the possibility of a levy on bank savings of up to 10 per cent.
“Anyone who thinks Britain is alone in having these challenges should look on their TV screens, look at tonight’s news and realise that it’s a very tough economic situation out there,” said Mr Osborne.
“Unless we in Britain front up to our own problems, the problems in our banking system, the problems that we are borrowing so much money, the problems that actually our businesses need more help to create jobs.
“If we don’t do those things then the difficult economic situation in Britain will get very much worse.”
The Chancellor acknowledged his austerity measures were “difficult” and the efforts to rebalance and repair the economy was “painstaking work”.
Shadow Chancellor Ed Balls called for the Coalition Government to increase borrowing in a bid to kick-start the economy.
“Unless you get the economy moving, unless you get some growth back, the deficit will stay high,” he said.
“Whereas if you act now with some stimulus to kick-start the economy, that’s the way to get growth moving.”
And he accused Mr Osborne and Prime Minister David Cameron of refusing to trying to save face.
“The only reason why they won’t now change course is to avoid their own political humiliation.
“That is no reason to stick to a failing plan. Stimulus now, kick-start the economy, get growth moving, that’s the only way to get the deficit down.”
DANIELLE and Christopher Newton are typical of the “squeezed middle” – the hard-working families struggling to make ends meet in the face of frozen wages and soaring costs.
Christopher, 32, works as a machine operator, but 27-year-old Danielle has little choice but to remain at home in Blackfell, Washington, and care for the couple’s three children.
Providing pre and post-school care for three kids would wipe out much of any wage she might bring in.
She would like to see Mr Osborne cutting the cost of childcare and reducing household bills.
“With rent, shopping, water rates, council tax and the like, it is quite tight,” she said.
“And with three children, I am limited as to how many hours I can work.”
Food bills and the cost of heating are particular problems.
“We are struggling a little but we just have to get through it,” added Danielle.
BUSINESSMAN Mark Anderson got a chance to drive his Budget message home in person.
The Maxim Brewery boss welcomed MP Brandon Lewis, minister with special responsibilty for community pubs, and took the chance to outline what the Government can do for small businesses in general, and the brewing industry in particular.
Marks wants to see an end to tax policy which he believes unfairly discriminates against brewers.
“I wanted to talk to him about the Beer Rate Accelerator,” he said, “which means beer duty goes up at two per cent above the rate of inflation and has put 40p on a pint in the last four years.
“That has a detrimental impact on public houses and our trade.
“It is an inflationary tax, which is unfair compared to other alcohol duty.
“The likes of cider, wines and spirits are not taxed in the same way.”
Mark wants to see more done to cut rising fuel costs to help small businesses reduce overheads.
“Year-on-year, these costs seem to be rising, rising for businesses and rising for people, which we can do absolutely nothing about,” he said.
“We need gas and electricity to actually produce the beer, but it is also costing us more and more to distribute it.
“It certainly makes us uncompetitive if these prices continue to rise.”