UK Welfare Cuts Due Before Next Election

Tia Oja,

Correspondent (Business)

 

LONDON — The British Chancellor, George Osborne, announced that notable cuts to welfare spending are to take place. With 16 months until the next General Election, the government is under pressure to start putting money back into people’s pockets after many years of scarcity. Osborne’s tough approach is based on an idea that the only way to bring the country’s economy back to life is to fix its finances.

Osborne wishes to cut £12 billion out of the United Kingdom’s annual welfare budget by the 2017/18 fiscal year. The Chancellor’s plan has not been happily accepted by other Members of Parliament. The leader of the Liberal Democrat party, Deputy Prime Minister Nick Clegg, has expressed his outrage by stating that he thinks Osborne is making a big mistake. Clegg feels that attempting to fix the country’s finances at the expense of the poor is the wrong way of approaching the problem. The Deputy Prime Minister has pointed out that this issue is expected to divide opinions within the Coalition government right before the election.

Even though the UK’s economy has been recovering little by little in the past years, according to recent polls, Osborne feels there are still major risks out there for the country’s economy. In his speech, at a car-parts plant in Birmingham, he especially pointed out the concerns revolving around the troubles of the Euro-zone. In addition, the Chancellor feels the undergoing repairs of Britain’s banking system pose their own kinds of risks for the economy.

It will be interesting to see how the different parties will react to the welfare cut plans. It also remains to be seen whether there will be division within parties, as there have already been divided opinions within the Coalition itself. What is certain is that this is not an easy problem to solve, and it will be intriguing to see whether the government manages to come up with a solution that pleases both the policy-makers and the public.

Image Courtesy: Wikimedia Commons (HM Treasury)