The biggest threat to Britain's economy is its huge budget deficit, and an emergency budget Tuesday will save the country from the fate of debt-stricken Greece, British Finance Minister George Osborne said Sunday. Measures expected to be included in the budget include a pay freeze for Britain's six-million-strong public sector, a bank levy and welfare benefit reform. Other plans include payroll tax breaks for new businesses and reform of public sector pensions. “You can see in Greece an example of a country that didn't face up to its problems, and that is the fate that I want to avoid,” Osborne told the BBC in an interview. “I'm absolutely clear, I don't want the question even asked, ‘Can Britain pay its way in the world?' I'm going to prove on Tuesday that we can,” he said, adding that the budget's austerity measures would be staggered over five years. Britain's budget deficit is at about 11 percent of national output, and reducing the deficit is the centrepiece policy of the new coalition government, made up of the centre-right Conservative Party and centre-left Liberal Democrats. Tuesday's budget is expected to be the tightest in at least 30 years, and with public sector job losses and deep pay and benefit cuts expected, the plan is likely to stoke public discontent and strain the fledgling ruling alliance. Osborne indicated capital gains tax – a tax on the sale of assets such as real estate and shares – would rise, despite vigorous opposition from senior Conservative politicians.
