International

UK to Announce its Largest Budget Cuts in Decades

Justin Velez

On Tuesday, October 19th, British Chancellor of the Exchequer George Osborne announced that major reductions would be made in government spending. Reductions across departments would amount to up to 25 percent. Additional welfare cuts are also expected. In addition, it is projected that approximately 500,000 jobs would be removed from the public sector. A separate report, outlining an eight percent cut in defense spending was also issued on Monday, amounting to a loss of 42,000 jobs in the Ministry of Defense. Child benefits for higher rate taxpayers are already in the process of removal. School budgeting will remain relatively unscathed, but social housing budget will be cut in half. The UK has also been affected by the economic downturn facing the United States. Whitehall argues that this move is necessary to combat the economic downturn. Yet many are accusing the coalition government of using the recession as an excuse to change ideology on spending. The proposal would mark a dramatic departure on spending values for the British government.

• Higher Rate Taxpayers: The 40 percent tax bracket earning more than £43,875 per year. Households will lose up to £1,000 in child benefits.
• Social Housing: Socialized housing for low-income workers. The budget cuts will dramatically affect this bracket, with reduction reaching to 50 percent.
• Whitehall: Road in Westminster in London. It is recognized as the center of the British Government, as it contains many of the government ministries, including Parliament and the Prime Minister’s Headquarters. It is often used as an alternate name for UK governmental administration, like Capitol Hill is used for to refer to Congress.
• Coalition Government: Form of government where several parties share the government leadership. Coalition governments often emerge when there is no clear party majority after an election cycle, and are therefore needed as a compromise in distributing power. Britain only recently created its coalition government with David Cameron as the Prime Minister. This is its first coalition government since 1945.
• Chancellor of the Exchequer: Title for the head Cabinet Minister responsible for economic and financial matters

Additional Reading:

http://www.bbc.co.uk/news/uk-politics-11579979