British finance minister Alistair Darling refused on Sunday to rule out future tax rises to cut a gaping budget deficit. Darling is due to publish the budget for the next financial year on March 24, the last major economic showpiece before an election widely expected on May 6 when the ruling Labour Party faces a tough fight to cling to power.
British media interpreted remarks by Darling's deputy, Liam Byrne, last week to mean the Labour government did not need further tax rises to meet its goal of halving Britain's 178 billion pound ($270 billion) budget deficit in four years starting next year. The main election battle is over how fast and deep to cut the deficit, forecast to exceed 12 percent of Gross Domestic Product this year.
The opposition Conservatives say Britain risks a crisis of investor confidence unless it starts cutting the deficit this year. Labour, in power for the last 13 years, says turning off the spending taps now risks aborting the economic recovery that began in the final quarter of 2009.