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More UK cuts but pill is sweetened

Wednesday, June 26, 2013 - 02:36

June 25 - British finance minister George Osborne unveiled spending cuts on Wednesday to try to tame the country's big public deficit, but promised to reinvest some of the money saved to counter criticism of excessive austerity. Joanna Partridge reports

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UPSOUND Selling the UK abroad. VisitBritain, the national tourism agency, is fearing the worst. They're funded by the UK's Department for Culture, Media and Sport - which has just seen its budget cut by 7% in the government's spending review. Britain's Finance Minister George Osborne unveiled another round of spending cuts, as he tries to keep his deficit-reduction plan on track SOUNDBITE: George Osborne, British Finance Minister, saying (English): "The economic risks are real and the recovery has to be sustained. if we abandon our deficit reduction plan, Britain would be back in intensive care." The new cuts will take effect in 2015, just as Britons go to the polls to elect a new government. Osborne had hoped he wouldn't have to make more. But his "Plan A" for deficit reduction has hit some obstacles. Osborne said it wasn't easy to find 11.5 billion pounds in savings. He says the biggest single saving is the £6 billion a year less the UK is paying to service its debts than the previous government budgeted for. Spending on international aid, health and education has been protected. But the Local Government department will make savings of 10%, as will the Ministry of Justice. And the Department for Business will face a budget cut of 6% in 2015-2016. PTC George Osborne says the Spending Review is part of his plan to move Britain from rescue to recovery. But few economists believe the cuts won't have much of an impact on the country's finances. John Longworth is Director General of the British Chambers of Commerce which represents 104,000 business members. SOUNDBITE: John Longworth, Director General, British Chambers of Commerce, saying (English): "There is lots of government spending that is actually ringfenced, it forces him to be playing at the margins. And there needs to be a radical shift of spending from current spending to capital spending, and also to underpin business investment for growth." To sweeten the cuts, Osborne promised £50 billion of capital spending in 2015 with more after that. SOUNDBITE: George Osborne, British Finance Minister, saying (English): "From roads to railways, bridges to broadband, science to schools, it will amount to over £300 billion of capital spending, guaranteed to the end of this decade." The opposition Labour party says British taxpayers are suffering more cuts - due to the government's failed policies. Both sides are trying to prove their economic credentials, to win over voters in 2015. Success at the ballot box may have a lot to do with how the UK economy is looking by then.

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More UK cuts but pill is sweetened

Wednesday, June 26, 2013 - 02:36

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