|George Osborne, centre, will outline about $125bn in public spending cuts [AFP]|
Britain’s government is expected to announce major cuts to its welfare state and public sector as it announces its most severe austerity measures since the second world war.
In an address to parliament on Wednesday, George Osborne, the country’s finance minister, will outline a $125bn cut in public spending that aims to reduce Britain’s deficit of 11 per cent of gross domestic product (GDP) to around two per cent within five years.
Under the cuts up to 500,000 public sector jobs could be lost, taxes could rise and around 1.2 million families are likely to lose their child benefit payments from 2013.
The measures will also affect the BBC broadcasting network, which receives some funding from the government, and will also reach to the monarchy of Queen Elizabeth II.
“I wish there was another way. I wish there was an easier way. But I tell you: There is no other responsible way,” David Cameron, the prime minister, said earlier this month.
The cuts come as figures reveal British public sector spending in September reached $25.5bn – a record high level for the month.
Analysts had initially forecast a slight rise from September 2009’s public net borrowing of $24.4bn.
Ruth Lea, a British economist, told Al Jazeera that Wednesday’s cuts were essential.
“If we don’t cut now the generations to come will have to pay for all this,” she said.
Lea added that the prospect of a “double-dip” recession was unlikely, saying: “Even though we talk about these enormous cuts they only mean one per cent year-on-year,” she said.
However, some economists have warned that the measures will tip Britain back into recession.
|Unions and the opposition have already expressed outrage over the cuts [Reuters]|
Mervyn King, the central bank governor, painted a gloomy picture late on Tuesday, saying it would be a long while before Britain could recover from the 10 per cent drop in output seen in the last recession.
Unions have already expressed anger over the prospect of high public sector job losses, and are planning a series of nationwide protests from Wednesday.
Public sector workers are expected to take part in rallies across the country, while a major demonstration in planned to take place in London, the capital, later in the day.
However the demonstrations are not expected to reach the same scale as those seen in other European cities.
The opposition Labour Party, which the current Conservative-Liberal Democrat coalition government blames for running up Britain’s massive debt when it was in power, has agreed there is a need for fiscal discipline.
But it says that the coalition are cutting too much too soon.
Alan Johnson, Labour’s spokesman on economic issues, accused Osborne of “economic masochism”, warning that his cuts would leave Britain trapped in a cycle of low growth and high unemployment for years.
The National Health Service, schools and overseas aid will be protected in Wednesday’s spending review, while science cuts are also expected to be lower than initially predicted.
The National Institute of Economic and Social Research think tank has said it believes the government will only be able to push through half the planned cuts.