Britain Announces Steep Austerity Measures

The British government is cutting nearly half a million public sector jobs over the next four years as part of a $130 billion cut in spending. Finance Minister George Osborne confirmed the cuts Wednesday in a widely anticipated announcement, saying the drastic budget cuts were the best way to reduce Britain's burgeoning debt.

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Today, Britain unveiled the biggest cuts in public spending since the Second World War. The government's been working on an austerity program for months in an effort to plug a huge budget deficit leftover from the global financial crisis.

NPR's Philip Reeves reports.

PHILIP REEVES: The British have been waiting anxiously to discover their government's plan for repairing the gaping hole in their economy. Today, the outline became clear. It was a critical moment for Prime Minister David Cameron, as he fielded questions in a packed house of parliament.

Prime Minister DAVID CAMERON (United Kingdom): If we don't tackle the deficit, every job in this country is at threat. That's the point. We are not doing this we are not doing this because we want to. There is no ideological zeal in this. We are doing this because we have to

REEVES: The British government is slashing its spending by the equivalent of $130 billion. It fell to the Chancellor of the Exchequer, or Finance Minister, George Osborne, to sell the plan.

Mr. GEORGE OSBORNE (Chancellor of the Exchequer, United Kingdom): Today is the day when Britain steps back from the brink, when we confront - when we confront the bills from a decade of debt, a day of rebuilding, when we set out a four-year plan to put our public services and welfare state on a sustainable footing for the long term.

REEVES: It took Osborne over an hour to spell out his plan to parliament. He argued the government has no choice.

Mr. OSBORNE: We have, at 109 billion pounds, the largest structural budget deficit in Europe, this at a time when the whole world is concerned about high deficits, and our economic stability depends on allaying those concerns.

REEVES: There'll be a huge cut in welfare, the equivalent of $11 billion. That's on top of earlier cuts of some $17 billion. Nearly half a million public sector jobs will go. Administration budgets for government departments are being cut by a third. Other measures include less money for police, higher education, local authorities and more.

The retirement age is going up earlier than previously planned. From 2020, Britons, men and women, will only get state pensions once they're 66. Even Queen Elizabeth will have to trim her gilt-edged lifestyle. Osborne said she'll have less to spend on the royal household.

(Soundbite of cheering)

REEVES: There was a boisterous welcome to all this from the government benches in parliament. Their opponents took a different view.

Unidentified Man: Alan Johnson.

Mr. ALAN JOHNSON (Shadow Chancellor of the Exchequer, United Kingdom): We've seen people cheering the deepest cuts to public spending in living memory - in living memory.

REEVES: Johnson, the Labor Party's shadow finance minister, agreed cuts are necessary. But he accused the government of slashing public spending for ideological reasons. Critics of the Conservatives, who lead the coalition, have long suspected them of plotting to destroy the welfare state. Johnson also said the cuts were being carried out with reckless speed.

Mr. JOHNSON: It's our firm belief, Mr. Speaker, that the rush to cut the deficit endangers the recovery and reduces the prospects for employment in the short term and for prosperity in the longer term.

REEVES: So far, Britain has not seen the mass protests over austerity programs that have paralyzed other parts of Europe, particularly France. For the public here, these spending cuts are still numbers on a page. Their response will only become clear when services and jobs actually start to disappear.

Philip Reeves, NPR News, London.

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