Thursday, October 21, 2010
Associated Press
LONDON
Britain outlined the sharpest cuts to public spending since World War II on Wednesday — slashing benefits and cutting public-sector jobs with an austerity plan aimed at clearing record debts that swelled during the global financial crisis.
After the country spent billions bailing out indebted banks and suffered a squeeze on tax revenue and an increase in welfare bills, Treasury chief George Osborne has staked the coalition government’s future on tough economic remedies.
Osborne confirmed there would be $128 billion in spending cuts through 2015, which he claims are necessary along with some tax increases to wipe out a spending deficit of $172 billion.
As many as half a million public-sector jobs will be lost, about $28.5 billion axed from welfare payments and the pension age raised to 66 by 2020, earlier than previously planned.
Even Queen Elizabeth II will take a hit, asked to trim the budget the government provides for her staff by 14 percent.
Osborne stood on the floor of the House of Commons for more than an hour and dismantled program after program built during the Labour government’s 13-year reign, saying Britain must pay “the bills from a decade of debt.”
The Conservatives promised to scythe through Britain’s debts after they made an unlikely pact to form a government with the smaller Liberal Democrats after an inconclusive May election.
Labour lawmaker Alan Johnson, his party’s economic spokesman, claimed many Conservatives relished the chance to shrink the size of the British state. “We’ve seen people cheering the deepest cuts to public spending in living memory,” he said.
Osborne insisted Britain’s richest would bear the greatest burden of tax rises and welfare cuts, citing changes that will see about 1.5 million better-off families lose child-benefit payments. However, housing payments and about a dozen other benefits for poorer Britons will also be restricted.