Britain to unveil huge spending cut plans
Britain's new coalition government will Monday outline how it plans to slash government spending by 6.0 billion pounds (6.9 billion euros, 8.7 billion dollars) to reduce the nation's record deficit.
A sharp deterioration in the eurozone economy has forced Britain to slash its huge public deficit faster than anticipated, Britain's Deputy Prime Minister Nick Clegg insisted on Sunday.
Official data released on Friday showed that the deficit had hit 156.1 billion pounds in 2009/2010, or 11.1 percent of gross domestic product (GDP).
That was lower than the previous estimate of 163.4 billion pounds -- but still a record high level.
The Sunday Times reported that the Department for Business, Innovation and Skills would bear the brunt of the initial cuts, making savings of 900 million pounds.
It added that the coalition plans to save 513 million pounds by slashing the budgets of advisory bodies and abolishing others, while civil servants' perks such as taxis, flights and hotel accommodation are also targets.
The coalition of Prime Minister David Cameron's Conservative Party and Clegg's Liberal Democrats could also end up cutting between 300,000 and 700,000 public sector jobs over the coming years, the weekly broadsheet added.
The government also plans to secure 8.0 billion pounds via a special tax on banks, according to The Independent on Sunday.
The paper said the figure is nearly three times higher than originally planned by finance minister George Osborne. Britain may also face a rise in the rate of tax on goods and services to as much as 20 percent from 17.5 currently.
Ahead of the country's general election earlier this month, Clegg had publicly opposed plans by the Conservatives to cut public spending this year by 6.0 billion pounds -- saying it was too much, too soon.
But in an interview with the BBC on Sunday, Clegg said "we need to show at a more accelerated timetable than I'd initially thought that we're going to get to grips with this great black hole in our public finances."
Clegg added: "I don't think anybody could have anticipated then (before the election) quite how sharply the economic conditions in the eurozone would have deteriorated and that the need to show that we were trying to get to grips with this suddenly became much greater.
"I don't think anybody could have predicted... the situation in Greece would have had this knock-on effect which has created immense anxiety on our European doorstep -- the European Union market to which we export the vast majority of our services and goods."
Britain's public finances have been ravaged by a record-length recession that has slashed taxation revenues and ramped up expenditure, as well as by enormously expensive banking-sector bailouts.
Britain's Treasury minister David Laws said on Saturday that the country faced an "age of austerity".
Elsewhere, The Sunday Telegraph said the new government plans an ambitious programme of at least 21 new bills over the next 18 months.
It intends to immediately bring in key school reforms and scrap the former Labour government's scheme to introduce identification cards for individuals, added the paper which said it had seen draft plans.
The government will officially outline its legislative intentions in a speech delivered by Queen Elizabeth II on Tuesday.
The paper said it had seen a draft of the speech which says the government's first priority is to "reduce the deficit and restore economic growth" and "accelerate the reduction of the structural budget deficit".
"The Queen is expected to go on to outline Government plans to make tax and benefits 'fairer and simpler'," it added.
© 2010 AFP