Osborne to Slash Jobs, Tax Banks in U.K. Budget Cuts – Bloomberg
Chancellor of the Exchequer George Osborne detailed the deepest budget cuts ever in Britain, eliminating almost 500,000 public-sector jobs and imposing a levy on banks to extract the “maximum sustainable” revenue.
“Today’s the day when Britain steps back from the brink,” Osborne told lawmakers in the House of Commons in London today as he outlined plans to virtually eliminate a 156 billion-pound ($245 billion) budget deficit. It’s “a day of rebuilding when we set out a four-year plan to put our public services and welfare state on a sustainable footing.”
At stake is Britain’s top credit rating, a fragile recovery from its longest recession on record and the future shape of the postwar welfare state. Investors said they’re concerned Osborne, 39, the youngest chancellor since 1886, will have difficulty delivering on the promises, which include a cut of 7 billion pounds from the welfare bill.
By reducing departmental spending by an average of 19 percent instead of the 25 percent he first estimated, Osborne relied more on trimming welfare, Hetal Mehta, an economist at Daiwa Capital Markets Europe Ltd. and a former U.K. Treasury official said. “Unlike more easily identifiable spending cuts such as a naval ship or a new school, reducing welfare payments is traditionally more difficult to both achieve and forecast.”
via Osborne to Slash Jobs, Tax Banks in U.K. Budget Cuts – Bloomberg.
