June 21, 2017 / 10:50 AM / 7 months ago

UK government keeps existing budget and wage goals in two-year plan

LONDON, June 21 (Reuters) - Britain’s government said it would pay greater heed to public concerns about austerity but stuck with the broad outlines of its plans to reduce the budget deficit as it set out its legislative plans for the next two years on Wednesday.

After Prime Minister Theresa May failed to win a majority in an early election on June 8, there had been uncertainty about how much of her Conservative Party’s pre-election policy goals would be put before parliament.

The plans published on Wednesday showed the budget deficit reduction goals are little changed from those set out by finance minister Philip Hammond in March. He is due to present a budget update later this year.

“We will reflect on the message voters sent at the general election - while always remembering that we have to balance the books,” the government said in a statement setting out the legislation it wanted to pass over the next two years.

“These rules take a balanced approach, combining the flexibility to support the economy if necessary in the near term, and the commitment to return the public finances to a sustainable position in the long term,” the statement added, echoing earlier language from Hammond.

March’s budget pencilled in a somewhat faster pace of deficit reduction than needed to reach the government’s longer-term goal to balance the budget, giving it a bit of room for manoeuvre to loosen spending controls if needed.

After the election, Hammond said he was “not deaf” to signs of weariness among voters about Britain’s near decade-long grip on public spending which has come under renewed criticism after a deadly fire in a London tower block.

Plans to raise Britain’s minimum wage for workers aged 25 and over to 60 percent of median earnings by 2020 also remained intact despite concern about its cost for employers from some business groups and labour market analysts. (Reporting by David Milliken; Editing by William Schomberg)

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