It has been reported that British Chancellor of the Exchequer George Osborne outlined an austerity budget package that called for a sales tax increase from 17 percent to 20 percent.

The British Broadcasting Corp. reported on Tuesday that Osborne called the budget proposal "tough but fair."

The budget includes a wage freeze for public employees earning over $25,000 per year, while those earning less would see a flat raise of $301 per year for the next two years.

It was also reported that the budget would cut family tax credits and introduce a new tax on banks and mortgage lenders starting January 2011 that is expected to raise $2.4 billion per year.

The BBC further said that Government departments would have their budgets cut 25 percent through 2014, with the exception of health and international development.

According to Osborne, he based his budget on economic growth of 2.6 percent a year through 2011, less than the 3.25 percent estimate used by former Chancellor Alistair Darling.

He further said that the aim is to eliminate Britain's budget deficit within five years. (With Inputs from Agencies)