Britain slashes spending ahead of emergency budget

17th June 2010, Comments 0 comments

Britain's coalition government said on Thursday it had decided to axe or suspend projects worth 11.5 billion pounds (14 billion euros, 17 billion dollars) in its drive to slash a record deficit.

Treasury minister Danny Alexander told parliament ahead of a key budget due on Tuesday that the Conservative-Liberal Democrat government had identified "poor" decisions made by the Labour administration which was ousted last month.

Alexander told lawmakers that the government would axe 12 spending projects worth 2.0 billion pounds, suspend another 12 initiatives costing 8.5 billion pounds, and cancel another 1.0 billion pounds in "unfunded" plans.

"We are determined to tackle the unprecedented budget deficit and bad financial management we have seen over the past decade, but are equally determined to do this in a way that is fair and responsible," Alexander said.

"As a result of the poor decisions made by the previous government, I have taken the decision to cancel certain projects that do not represent good value for money, and suspend others pending full consideration in the spending review."

Alexander, who is Chief Secretary to the Treasury and seen as finance minister George Osborne's deputy, added that the previous government had also approved certain "unfunded" initiatives -- without earmarking cash for them.

"We have also found another spending blackhole in the previous government's plans -- projects had been approved with no money in place to pay for them," added Alexander, who is a Liberal Democrat.

"I am determined to deal with this problem head-on and ensure we never see this kind of irresponsible financial planning in government again."

The raft of spending cut announcements come ahead of next Tuesday's emergency budget from Chancellor of the Exchequer Osborne, who is a member of Prime Minister David Cameron's Conservative party.

Britain's public finances were hammered by a record-length recession, which ravaged taxation revenues and pushed up unemployment benefit expenditure.

At the same time, a series of enormously expensive banking-sector bailouts placed the public purse under intense pressure

Britain's public deficit had rocketed to a record 156 billion pounds in the last 2009/2010 financial year.

Under new forecasts unveiled earlier this week, the deficit is forecast to stand at 155 billion pounds, or 10.5 percent of gross domestic product (GDP), in the current fiscal year to March 2011.

© 2010 AFP

0 Comments To This Article