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September 13, 2010

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Home » Business » Economy

UK budget plan sees deep cuts in welfare

BRITAIN'S coalition government defended plans to cut the welfare bill yesterday and warned that failing to reduce spending would profoundly damage the economy as it recovers from the worst recession since World War II.

Chief Secretary to the Treasury Danny Alexander said Britain must cut its record peacetime budget deficit or risk slipping into the economic chaos seen in European countries like Greece.

The opposition Labour Party said the pace and scale of the proposed cuts was "savage" and could harm the economic recovery.

The head of Britain's Trades Union Congress, an umbrella group, said the public would not accept "eye-wateringly unfair" measures, while one transport union leader called for coordinated industrial action and civil disobedience.

Other European countries have already seen mass protests over austerity cuts. Over a million people marched in France last week to demonstrate against proposed pension reforms.

Rejecting criticism that the cuts were too severe and would hit the most vulnerable people hardest, Alexander said the 200-billion pound annual bill for unemployment payments and other benefits was too big to be ignored.

"Welfare is an area that we have to look at," he told Sky News. "Tackling the enormous deficit that Labour left us with is essential to underpinning the economic recovery. If we don't do that ... then we would end up in a worse economic position.

"This year we are spending 150 billion pounds more than we will raise in tax. We have to get that gap under control. If we don't do that then there will certainly be a huge problem with our economy."

TUC chief Brendan Barber said the government was cutting too much, too quickly.




 

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