LONDON (AP) -- Austerity will remain in place in Britain for years to come, the government insisted Thursday even though the U.K. economy is growing faster than most of its peers.
That was the message from British finance minister George Osborne as he unveiled his latest tax and spending plans. Despite painting a brighter economic picture for the U.K. economy and even suggesting that the country could be running a budget surplus by the end of the decade, there were few giveaways to hard-pressed households up and down the land.
Osborne cautioned that the public coffers remain strained and that the country will have to wait longer to see the end of years of austerity. He pledged to "fix the roof while the sun is shining" even when the budget is expected to start turning a small cash surplus in 2018-19.
"The hard work of the British people is paying off and we will not squander their efforts," he told a boisterous House of Commons during his Autumn Statement.
Though Britain's recovery from the savage 2008-9 recession has generally been muted, it is currently doing better than most other major economies around the world - its quarterly growth rate of 0.8 percent in the third quarter is better than Germany's 0.3 percent and even the U.S.'s 0.7 percent.
Osborne said the British economy is expected to grow by 1.4 percent this year instead of the previous forecast in March of 0.6 percent. Next year, growth is forecast to be even stronger at 2.4 percent instead of 1.8 percent.
But Osborne insisted there was more to do to repair the damage to the public finances wrought by a banking sector collapse and the country's deepest economic recession since World War II.
He outlined more measures to get the British public finances into better shape in the years and decades to come.
One notable announcement was an earlier-than-planned increase in the state pension age to 68 for most of those in their 40s currently. In addition, he announced a capital gains tax on overseas buyers of property that has quickly been dubbed the "oligarch tax" by British media.
Osborne did offer some concessions, telling lawmakers he would curb energy bills, extend free school meals program for children up to 7 years old and implement other programs to help families struggling to make ends meet.
Overall, the measures announced were fiscally neutral and markets little changed.
The measures on energy in particular come in response to attacks from the opposition Labour Party, which argues that the Conservative-led government is presiding over a recovery that is only being felt by a few, mainly the rich in and around London. Earlier this year, Labour leader Ed Miliband promised to freeze energy prices for 20 months if he wins the next general election, scheduled for May 2015.
Labour's finance spokesman Ed Balls continued the attack on the government in his response to Osborne, arguing that the government's austerity medicine has held back the British economy over the past few years and that the recovery from recession is the slowest in a hundred years.
"For all his boasts and utterly breathtaking complacency, the chancellor is in complete denial which is defining this government in office, that under this chancellor and prime minister, for most people in this country, living standards are falling for year on year," he said. The massed ranks of the Labour benches shook as lawmakers screamed their approval.
Despite the improving outlook for the U.K. economy, which is Europe's third-biggest behind Germany and France, much of the country is still seeing a squeeze on living standards with wages more often than not being outstripped by price rises, particularly with regard to gas and electricity.
Scientists and public health experts criticized the government earlier this week in a letter to the British Medical Journal, saying that the rise in the number of people who need food banks "has all the signs of a public health emergency." And the Trussell Trust, a charity that operates food banks nationwide, has warned that with winter approaching, the worst may be yet to come.
The coalition government, which was formed in 2010, insists that its strategy for dealing with Britain's debt is the right one to pursue and that a failure to get the public finances into shape will spell more misery ahead. Measures taken over the past few years include cuts in welfare payments, a new fee for public housing tenants with spare bedrooms as well as increases in the pension age.
Osborne pointed to the growth and borrowing figures that the strategy is working. He said the country's debt burden should start falling as a proportion of national income by 2016-17 after peaking at 80 percent of annual gross domestic product the year before.
While Osborne was delivering his statement, the Bank of England, as expected, kept its main interest rate unchanged at the record low of 0.5 percent and refrained from injecting more money into the U.K. economy.