Unlike Their American Counterparts, UK Leaders Lay Out Austerity Plan
October 21, 2010 by Special To Personal Liberty
Both nations are plagued by record-high deficits and government debt, but the United Kingdom seems to be embarking on a road to fiscal health, following the announcement of new austerity measure.
British Chancellor of the Exchequer George Osborne — the equivalent of the American Treasury Secretary — has announced that in order to close the budget gap of of 109 billion pounds ($172 billion) over the next four years, the government will implement 81 billion pounds ($128 billion) in spending cuts as well as some tax increases, according to The Associated Press.
Moreover, Britain's generous welfare system will see cuts of about 18 billion pounds ($28.5 billion) and the pension age will be raised to 66 by 2020. Even the Queen's household will be affected, as expenditures on her staff will fall by 14 percent.
Osborne, who serves under conservative Prime Minister David Cameron, said that "it is a hard road, but it leads to a better future." However, he added that to cushion the impact of the austerity measures the government will direct most of the tax hikes and welfare cuts, such as those for child benefit payments, toward richer families.
During the 2008 financial crisis, the UK bailed out its banks to the tune of 6 billion pounds ($9 billion). The United States — where some commentators point out that even Republicans are loath to discuss details of the government spending cuts they say they champion — spent more than $700 billion on The Troubled Asset Relief Program (TARP).