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UK swings austerity axe but spares key welfare scheme, police

Update: November, 26/2015 - 12:20

LONDONBritain announced a fresh round of deep cuts to public spending on Wednesday, but dropped a plan to reduce welfare payments for the poorest and spared the police from savings after the Paris attacks.

Unveiling a budget update, finance minister George Osborne said the government, which is borrowing 73.5 billion pounds (US$110 billion) this year, is on track to balance its books by 2019-20.

This will be achieved through the most significant belt-tightening in a generation, which includes reducing welfare by 12 billion pounds and the cutting budgets of some government departments by up to 37 per cent.

However, Osborne, Prime Minister David Cameron's de facto deputy, avoided a succession of political landmines as he announced his plans to a packed House of Commons.

He dropped a plan to reduce tax creditsa benefit payment for low-income working familiesafter the House of Lords voted last month against the move in a humiliating defeat for the government.

Opponents of the cuts, including many within his own Conservative party as well as the main opposition Labour party under Jeremy Corbyn, said it would have left over three million families worse off.

"I've listened to the concerns. I hear and understand them," Osborne told lawmakers.

"Because I've been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether."

Protecting the police

Treasury sources indicated that the full 12 billion pounds of planned welfare savings would still be carried out through reductions to other types of state benefits.

Experts said the spending plan helped position Osbornea likely prime ministerial contender when Cameron steps down by 2020and the Conservatives in the political centre ground.

Finance minister since Cameron took office in 2010, Osborne said his spending plan was affordable because of projections that tax revenues were set to increase.

The 44-year-old also sprung a surprise by announcing that police funding would not be cut, defying a widespread expectation among senior officers and commentators.

"Now is not the time for further police cuts," Osborne told the Commons.

"The police protect us and we're going to protect the police."

In England and Wales, the number of police has fallen nearly 12 per cent since 2010 and senior police figures had warned that a further reduction could hit their ability to prevent a major Paris-style attack in Britain.

Britain's official economic growth forecast was held at 2.4 per cent for 2015, but revised up to 2.4 per cent for 2016 from 2.3 per cent.

Debt was predicted to be 82.5 per cent of national income this year, down from 83.6 per cent at the time of Osborne's annual budget in July. — AFP

 

 

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