Sunday, September 12, 2010

UPDATE 1-UK coalition defends deep cuts, unions protest

Britain's coalition government defended plans to cut the welfare bill on Sunday and warned that failing to reduce spending would profoundly damage the economy as it recovers from the worst recession since World War Two.
Chief Secretary to the Treasury Danny Alexander said Britain must cut its record peacetime budget deficit or risk slipping into the economic chaos seen in European countries like Greece.
The opposition Labour Party said the pace and scale of the proposed cuts was 'savage' and could harm the economic recovery.
The head of Britain's Trades Union Congress (TUC), an umbrella group, said the public would not accept 'eye-wateringly unfair' measures, while one transport union leader called for coordinated industrial action and civil disobedience.
Other European countries have already seen mass protests over austerity cuts. Over a million people marched in France last week to demonstrate against proposed pension reforms.
Rejecting opposition criticism that the cuts were too severe and would hit the most vulnerable people hardest, Alexander said the 200 billion pound annual bill for unemployment payments and other benefits was too big to be ignored.
'Welfare is an area that we have to look at,' he said in an interview with Sky News. 'Tackling the enormous deficit that Labour left us with is essential to underpinning the economic recovery. If we don't do that...then we would end up in a worse economic position.

GAP
'This year we are spending 150 billion pounds more than we will raise in tax. We have to get that gap under control. If we don't do that then there will certainly be a huge problem with our economy.'
TUC chief Brendan Barber said the government was cutting too much, too quickly and the public would oppose the measures.
'The cuts have only just started to bite,' he told a news conference. 'When their full extent becomes clear, I know the country will join with us in saying 'no' once again to policies that are so eye-wateringly unfair.'
Bob Crow, head of the RMT rail union, said workers should plan industrial action together to cause the maximum disruption.
'We should coordinate that resistance to defend working men and working women. What we need is...a campaign of civil disobedience to stop these cutbacks taking place.'
Britain's Conservative and Liberal Democrat coalition was formed after an inconclusive election in May ended 13 years of Labour party rule.
Centre-right Conservative Prime Minister David Cameron said his priority was to cut a deficit running at around 11 percent of gross domestic product and rebuild the economy.
He has long warned that Britain needs to rein in spending in order to avert a downgrade of its AAA credit rating, which would in turn raise the cost of borrowing for government.
The centrist Liberal Democrat party has publicly supported the austerity steps but commentators say cuts will put pressure on the coalition, which is a rarity in British politics.
Finance minister George Osborne has told ministers to help cut public spending by 25 percent over the next four years. He will announce details of the savings on Oct. 20.
Former Labour work and pensions minister Yvette Cooper said the government's approach was 'deeply unfair'.
'We have got to bring the deficit down, but we should do it in a steady, sensible way and not at such a savage pace that you end up destroying jobs,' she told BBC television.

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