British PM vows stinging govt cuts will be 'fair'

6th October 2010, Comments 0 comments

British Prime Minister David Cameron is to promise that harsh public sector cuts will be "fair", while admitting jobs and services will be badly hit in a major speech Wednesday.

Cameron will also sharply criticise bankers, telling them to start lending to small businesses -- "the doers and grafters" -- who he hopes will kickstart Britain's fragile economy as he imposes the sharpest reductions in decades.

His speech comes on the last day of his Conservative party's conference -- its first since taking power in a coalition in May -- which has focused on reassuring Britons over the cuts, being announced on October 20.

"The spending cuts we do have to make, we'll make them in a way that is fair," Cameron will say in the speech from 2:30pm (1330 GMT), according to comments pre-released by his office.

"Reducing spending will be difficult. There are programmes that will be cut. There are jobs that will be lost. There are things government does today that it will have to stop doing.

"But let's remember, a lot of businesses have had to make the same or bigger savings in recent years."

The Conservatives announced a big shake-up of Britain's welfare system at the conference, scrapping universal child benefit payments from the state to under 16s.

But the decision to scrap child benefit for high earners was criticised by some Tories because they fear a backlash over a loophole which means double-income couples earning over 80,000 pounds a year will still be able to claim it.

Cameron's Conservative-Liberal Democrat coalition is bidding to tackle a record deficit of 154.7 billion pounds (188 billion euros, 242 billion dollars) inherited from the last Labour government under Gordon Brown.

Reductions are expected to average around 25 percent over four years in most government departments and have prompted threats of strike action by Britain's trade unions.

Britain emerged from recession at the end of last year and opposition politicians charge it could still be pushed back into the red by the cuts.

Senior Cabinet minister Ken Clarke, a former finance minister, admitted Sunday that a double-dip could not be ruled out.

But Cameron wants smaller businesses to lead the country in growing the economy.

His speech will lavish praise on them, saying: "It will be the doers and the grafters, the inventors and the entrepreneurs who get this economy going... we need to get behind our wealth creators."

By contrast, he will criticise bankers blamed for helping trigger the 2008 financial crisis for failing to lend enough money to small business.

"There's another way we're getting behind business -- by sorting out the banks," he is to say.

"Taxpayers bailed you out -- now it's time for you to repay the favour and start lending to Britain's small businesses again."

Cameron warned that massive bonuses for bankers were "intolerable" unless they lent more money to businesses who needed it in a BBC interview Tuesday and pledged to "look very carefully at this bonus issue."

© 2010 AFP

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