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The following article was published in our article directory on October 25, 2010.
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UK Launch Mint Austerity Plan

Article Category: Business

Author Name: xia zihui

British Finance Minister Osborne on October 20 formally submitted to Parliament the "assessment of public expenditure" report, planned for the next four financial years to reduce public spending 81 billion pounds, which is the largest since World War II Britain, the most "severe" financial tightening action.

Reduction of 18 billion employee benefits cut off 1 / 10

The report was submitted in June this year "emergency budget" program compiled on the basis of the program to reduce the fiscal deficit as the core objectives by the significant reduction in government spending the next few years, a framework plan. The reduction of the report's more specific projects, the most interesting are: cuts in social welfare spending 18 billion pounds, close to the amount of the total reduction of 1 / 4; reduction of about 50 million public sector employees, accounting for 1 / 10.

Other cuts include: reduction of 8% of defense spending, cut spending 24% of Foreign Ministry of the Interior, the Ministry of Justice of the reduction of 6% of expenditure, business, innovation and skills, the Ministry of Community and Local Government Affairs of the reduction of 7.1%, culture, media and reduction of 41% of the sports department, the Ministry of Energy and Climate Change ... ... only 5% reduction in health care, foreign aid, transportation and other areas of primary and secondary education expenses to be spared. In addition, the report will increase the proportion of individuals to pay 3% of the pension, the British retirement age from 65 years to 66 years, this annual savings of 5 billion pounds pension. In order to increase income, the Government will focus on improving value-added tax, capital gains tax and special tax for banks.

Thus, the British Government is determined to eliminate fiscal deficits of both open source and cutting his hands, but the throttle is heavy. If the smooth implementation of the plan, in the 2014-2015 year, the deficit will narrow to 370 billion pounds, could be the next financial year to achieve zero deficit.

'm Kenyinggutou "medicine" drawing vibration

British analysts believe that the reduction in benefits was then known as the "Iron Lady" said the former Prime Minister Margaret Thatcher wanted to do and not dare to do, because she worried about this to pay the "political price" is too great. Therefore, the coalition government the courage to bite a piece of "hard bone" really can be described as action "courageous."

The publication of "public spending assessment" report on the same day, Osborne made in the House of carefully prepared speech, to persuade members and the public to accept and support the Government's cuts in public spending programs. Osborne said in his speech, the new government on the stage, "British verge of bankruptcy" ,2009-2010 fiscal year's budget deficit reached 154.7 billion pounds, a record. Only one interest, the Government would pay 43 billion pounds a year, an average of nearly 120 million pounds a day. Therefore, in order to restore fiscal health and to maintain long-term sustainable economic growth, large fiscal deficit problem solving is imperative, otherwise the British would go "economic ruin" of the road. The coalition government took office in May this year, the actions taken since have put the UK out of the "financial danger zone." Osborne said the government cut spending to follow the three principles, namely the principle of reform, the second is the principle of fairness, the three principles of growth. In his view, "This is a difficult road, but will lead to a bright future."

Reduction program that the government agent "strong medicine" Once thrown, immediately caused a strong vibration in the UK. Osborne in parliament in a speech at the same time, some people gathered at the Prime Minister outside the gates of 10 Downing Street to protest against the Government's welfare-cutting plan. Although the opposition Labor Party advocates deficit reduction, but accused the government's plans to low-income people "unfair" and even to the national economy back into recession risks. However, opinion polls have shown that most Britons are in favor of deficit reduction, but the cuts and speed in disagreement, and economists have different views on this. Even within the ruling Conservative Party and Liberal Democratic Party, some members worried that the Government's reduction of action too, it may hurt the current fragile economic recovery.

Involving a wide range of transnational

Britain's austerity plan is to drastically cut spending so much, as it is cutting jobs, many British families will be under pressure. Economists believe that the French plan only outlined the contours of an ideal, some reduction in the amount and method of calculation is theoretically feasible, can achieve the target there are still many uncertain factors.

Britain introduced the "iron hard savings plan." Improve the welfare and tax reduction, the British therefore lower consumption, which may cause instability in the British economy to be affected, and even the recovery became impossible. But the German public in general that this is the United Kingdom made the necessary efforts to reduce the deficit, as the British have a similar risk of debt crisis, the British must swallow a dose of this "bitter medicine."

Cameron whether the Government planned savings in 4 years, 81 billion pounds is currently unknown, "as announced a radical surgery and will be carried out in the end of the surgery are two different things." The program is both for the UK economy for the ruling coalition, is a huge challenge.

Some European observers that the Government's deficit reduction program to achieve the desired results depending on whether the future health of the UK economy. If reform "pilot" success, other European countries will follow suit, while the Conservatives will also increase at the next reelection campaign chips.

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