News / Europe

    Britain Makes Huge Cuts to Avert Debt Crisis

    Multimedia

    Audio
    Henry Ridgwell

    Britain's new coalition government has passed an emergency budget after warning the state of the country's finances is much worse than anticipated.

    The Clapham Park Estate was once voted one of the worst social housing developments in London.  The window frames are crumbling, the apartments are dark and damp and the estate suffers from high levels of crime, drug use and unemployment.  Many of the residents are reliant on state handouts to get by.  It is places like this that could be hit hardest by cuts in housing and social benefit.

    The apartment blocks were due to be demolished and rebuilt, but the money has run out.  Vernon de Maynard is chair of the local residents' association.

    "We are asking when we are going to get decent homes," he said.  "They tell us 2016, or 2017 plus ... so again it is the little person at the bottom of the scale who gets it in the neck."

    Britain's new chancellor, George Osborne of the Conservative Party, claims the previous Labor Party administration took the country to the edge of bankruptcy.

    In an emergency budget he outlined, public spending will be slashed by one quarter over five years, heralding widespread job losses in the public sector and cuts to Britain's welfare state. 

    The new budget has been met with angry protests.

    "Eighty percent, four-fifths of dealing with this deficit that we are now in, through the bankers and all the problems that they caused, is to be borne by public services workers and the services that they provide," said Dave Prentis general secretary of the public service union, 'Unison'.

    Britain's government spent more than $1.25 trillion on bailing out banks following the economic crisis.  It has helped push the deficit in Britain to more than 11 percent of GDP, one of the highest debts in Europe.

    The government says Britain, like Greece or Spain, is in danger of losing its triple-A credit rating, so it is slashing spending to balance the books.

    Susan Anderson from the Confederation of British Industry, which represents private businesses, says the government is right to take drastic action.

    "The U.K. is facing a considerable period of austerity," said Anderson.  "We have got one of the highest deficits in the OECD, we know we need to take action.  We think the government has taken the right balance between cutting public spending and some tax increases."

    With its own sterling currency, Britain has been able to keep the euro currency crisis at arm's length.  But Europe is Britain's biggest trading partner, and any problems there hit the British economy.

    Economics Professor Wendy Carlin, of University College London, says there is a further risk that simultaneous cuts across the continent will make things worse.

    "The problem is if all the big countries in Europe cut spending at the same time it is very difficult to see where the extra sources of demand are going to come from to sustain growth," said Carlin.

    Just a mile from the bustle of London's financial district lies Borough Market.  Among the pricey food and drink stalls, Michele Marconi arranges the exotic blooms at her flower shop, Chez Michele.  They are the type of luxury item that are vulnerable in a downturn, and which now face an increase in sales tax to 20 percent.  Michele takes a philosophical viewpoint.

    "In my position I cannot do a lot, I just have to follow what happens," said Marconi.  "They are probably going to buy less flowers, but I think if you still maintain quality your customers will always come back."

    Such optimism is reflected in the general public.  A recent poll showed 59 percent of British people support the government's spending cuts.  Its message about the danger of the debt appears to be getting through.

    But the full effects of the cuts will only be felt in the coming years.  More protests like this seem certain as British society faces it biggest transformation in a generation.

    Britain's new coalition government has passed an emergency budget after warning the state of the country's finances is much worse than anticipated.

    The Clapham Park Estate was once voted one of the worst social housing developments in London. The window frames are crumbling, the apartments are dark and damp and the estate suffers from high levels of crime, drug use and unemployment. Many of the residents are reliant on state handouts to get by. It is places like this that could be hit hardest by cuts in housing and social benefit.

    The apartment blocks were due to be demolished and rebuilt, but the money has run out. Vernon de Maynard is chair of the local residents' association.

    "We are asking when we are going to get decent homes," he said. "They tell us 2016, or 2017 plus ... so again it is the little person at the bottom of the scale who gets it in the neck."

    Britain's new chancellor, George Osborne of the Conservative Party, claims the previous Labor Party administration took the country to the edge of bankruptcy.

    In an emergency budget he outlined, public spending will be slashed by one quarter over five years, heralding widespread job losses in the public sector and cuts to Britain's welfare state.

    The new budget has been met with angry protests.

    The general secretary of the public service union, 'Unison', is Dave Prentis.

    "Eighty percent, four-fifths of dealing with this deficit that we are now in, through the bankers and all the problems that they caused, is to be borne by public services workers and the services that they provide," said Prentis.

    Britain's government spent more than $1.25 trillion on bailing out banks following the economic crisis. It has helped push the deficit in Britain to more than 11 percent of GDP, one of the highest debts in Europe.

    The government says Britain, like Greece or Spain, is in danger of losing its triple-A credit rating, so it is slashing spending to balance the books.

    Susan Anderson from the Confederation of British Industry, which represents private businesses, says the government is right to take drastic action.

    "The U.K. is facing a considerable period of austerity," said Anderson. "We have got one of the highest deficits in the OECD, we know we need to take action. We think the government has taken the right balance between cutting public spending and some tax increases."

    With its own sterling currency, Britain has been able to keep the euro currency crisis at arm's length. But Europe is Britain's biggest trading partner, and any problems there hit the British economy.

    Economics Professor Wendy Carlin, of University College London, says there is a further risk that simultaneous cuts across the continent will make things worse.

    "The problem is if all the big countries in Europe cut spending at the same time it is very difficult to see where the extra sources of demand are going to come from to sustain growth," said Carlin.

    Just a mile from the bustle of London's financial district lies Borough Market. Among the pricey food and drink stalls, Michele Marconi arranges the exotic blooms at her flower shop, Chez Michele. They are the type of luxury item that are vulnerable in a downturn, and which now face an increase in sales tax to 20 percent. Michele takes a philosophical viewpoint.

    "In my position I cannot do a lot, I just have to follow what happens," said Marconi. "They are probably going to buy less flowers, but I think if you still maintain quality your customers will always come back."

    Such optimism is reflected in the general public. A recent poll showed 59 percent of British people support the government's spending cuts. Its message about the danger of the debt appears to be getting through.

    But the full effects of the cuts will only be felt in the coming years. More protests like this seem certain as British society faces it biggest transformation in a generation.

    You May Like

    Vietnam Urges US to Lift Lethal Weapons Ban Amid S. China Sea Tensions

    US president’s upcoming visit to Vietnam underscores strength of relationship, and lifting embargo would reflect that trust, ambassador says

    Are US Schools Turning a Blind Eye to Radical Qatari Preachers?

    Parade of radical Islamist clerics using mosque at Qatar’s Education City draws mounting criticism for American universities that maintain satellite branches there

    South Pole Diary: In Round-the-clock Darkness, Radiant Moon Shines Like the Sun

    You hear more and see more when the moon first comes out; it’s your senses in overdrive, tuning into a new world.

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Displaced By War, Syrian Artist Finds Inspiration Abroadi
    X
    May 02, 2016 1:36 PM
    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Ethiopia’s Drought Takes Toll on Children

    Ethiopia is dealing with its worst drought in decades, thanks to El Nino weather patterns. An estimated 10 million people urgently need food aid. Six million of them are children, whose development may be compromised without sufficient help, Marthe van der Wolf reports for VOA from the Metahara district.
    Video

    Video Little Havana - a Slice of Cuban Culture in Florida

    Hispanic culture permeates everything in Miami’s Little Havana area: elderly men playing dominoes as they discuss politics, cigar rollers deep at work, or Cuban exiles talking with presidential candidates at a Cuban coffee window. With the recent rapprochement between Cuba and United States, one can only expect stronger ties between South Florida and Cuba.
    Video

    Video California Republicans Weigh Presidential Choices Amid Protests

    Republican presidential candidates have been wooing local party leaders in California, a state that could be decisive in selecting the party's nominee for U.S. president. VOA's Mike O’Sullivan reports delegates to the California party convention have been evaluating choices, while front-runner Donald Trump drew hundreds of raucous protesters Friday.
    Video

    Video Kurdish Football Team Helps War-Torn City Cope

    With the conflict still raging across much of Turkey’s predominantly Kurdish southeast, between the rebel PKK and the Turkish state, many Kurds are trying to escape the turmoil by focusing on the success of their football team Amedspor in Diyarbakir. The club is increasingly becoming a symbol for Kurds, not only in Diyarbakir but beyond. Dorian Jones reports from southeast Turkey.
    Video

    Video ‘The Lights of Africa’ - Through the Eyes of 54 Artists

    An exhibition bringing together the work of 54 African artists, one from each country, is touring the continent after debuting at COP21 in Paris. Called "Lumières d'Afrique," the show centers on access to electricity and, more figuratively, ideas that enlighten. Emilie Iob reports from Abidjan, the exhibition's first stop.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.

    Special Report

    Adrift The Invisible African Diaspora