With the spending review outlined by George Osborne the Chancellor yesterday it has awaken the UK community to think and consider what is happening and what has befall us. Events leading up to the morning was like a preparation for an event of a catastrophic nature until this morning while watching the morning news the broadcaster had to remind the viewers that nothing has happened as yet.
On facebook and social network sites there have been negative reactions claiming that this is a return to the 80’s and that it is end times.
No doubt and no one should be fooled it has been estimated that the measures will lead to the loss of 490,000 public sector jobs, but Mr Osborne told BBC Breakfast he expected many more private sector jobs to be created over the four year cuts programme.
Mr Osborne in his address told MPs on Wednesday that he had acted to restore “sanity to our public finances” and deal “decisively” with Britain’s record peacetime deficit.
The Institute for Fiscal Studies, an independent think-tank, has warned that the deficit could turn out to be larger than expected, and suggested that Mr Osborne should review his plans after two years.
But in a BBC Radio Four interview, Mr Osborne maintained and insisted he would stick to the plan he has set out.
“People say ‘Where’s your plan B?’ I’ve got a Plan A, which is a pretty good situation. We’ve got the plan,” he said.
He added: “This is the plan we’ve set out. The country needs a decisive plan.”
Yet even as he ruled out any change in his spending plans, Mr Osborne signalled that in the event of a new economic slowdown, he would look to the Bank of England to help the economy.
That could mean either keeping interest rates low or printing more money through quantitative easing.
Mr Osborne said: “There is of course the freedom for the Bank of England to deploy monetary policy tools as well.”
The Chancellor also said that his plans have “some caution built in”, because he has pencilled in more spending cuts for 2015/16, after the point when he expects the budget to be balanced.
Critics have also said that the spending cuts will have a “regressive” effect, hitting the poor harder than the rich.
The IFS has said that the cuts would take a larger proportion of the income of poor households than that of the rich.
Mr Osborne said he had made “a conscious choice” to protect spending on health, aid and schools, and that forced him to cut welfare spending. Overall, welfare spending will fall by £18 billion a year by 2014/15.
He said: “I have chosen in part to pay for that by trying to curb the rise in the benefits bill. That has involved some hard choices but I think they are fair choices. We have got to put the welfare state on a sustainable footing.”
This will be interesting times even though I was told not to say interesting times due to the draconian cuts. However do have a look at this site Where Are The Cuts? http://wherearethecuts.org/ which is a new website designed to map the specifics of the Comprehensive Spending Review and the coalition Government’s cuts agenda. According to its creator Richard Pope “instead of billions being bandied about, you’re more likely to see details on £500 cut from your local theatre.”
Finally, I was reminded of a cartoon a few years ago where two persons were in a tunnel and they both saw a light at the end of the tunnel, one said “look there is light at the end of the tunnel I can see let us go forward”, the second said “ look it is an oncoming train stay put ” Which one will you be?
21st October 2010