Cautious Budget by Thatcher Offers Little Hope for Relief

Prime Minister Margaret Thatcher’s government today unveiled a cautious annual budget likely to bring little short-term relief to Britain’s battered economy or her own slumping popularity.

Rattled members of Thatcher’s Conservative Party, braced for an embarrassing by-election setback later in the week, cheered Chancellor of the Exchequer John Major as he announced “a saver’s budget” he said would take no risks with inflation.

He announced a plan to encourage Britons to save, rather than spend, by creating special savings accounts that offer tax-free interest.

But the main proposals in what was termed a neutral budget hit the average Briton with increases in duty on alcohol, tobacco and gasoline.

And the pound fell after he said inflation would rise above its current annual rate of 7.7% and not fall significantly until next year.

Major announced no significant tax changes in his first budget, also the first to be televised from the centuries-old House of Commons.

Uproar broke out toward the end of Major’s 90-minute address as he announced a concession designed to ease the impact of a new so-called “poll tax” which comes into force in England and Wales on April 1.

Opposition politicians angrily demanded that it be made retroactive in Scotland, where the poll tax or community charge has been in force for the past year.

The tax, which replaces local property rates with a levy on all adults, has been attacked by critics as taking no account of people’s ability to pay.