Doubts mount over Britain's austerity drive

6th February 2011, Comments 0 comments

Doubts are growing in Britain over Prime Minister David Cameron's strategy to restore growth by cutting spending, amid a stream of worrying economic data and an increasingly hostile public.

The surprise announcement last month that the economy shrank by 0.5 percent in the fourth quarter of 2010 sparked national concern just as ordinary Britons were beginning to feel the effect of a major austerity drive.

Cameron wants to save more than £80 billion ($130 billion, 95 billion euros) over four years to reduce the budget deficit -- the toughest cuts in Europe -- and the consequences are being played out in vivid detail in the press.

Tales of support for disabled people being slashed, rubbish collections being scaled back to once a fortnight, library and bus services being scrapped and the even the national forests being rented out are all eroding support.

A recent YouGov poll found that public approval for the Conservative-Liberal Democrat coalition's strategy had fallen from 53 percent in June -- a month after the government took power -- to 38 percent now.

Some 57 percent in the poll said the cuts were being imposed unfairly.

Surveys also show consumer confidence in the economy has fallen to its lowest monthly figure in almost 20 years.

This only adds to the anxiety caused by soaring inflation and rising unemployment -- the jobless rate among young people is at a record 20 percent -- while the number of people declared insolvent hit a 40-year high in 2010.

Although his spending cuts will result in the loss of an estimated half a million public service jobs over four years, Cameron has insisted the private sector will take up the slack and drive the economic recovery.

But this argument took a hit when US pharmaceutical giant Pfizer announced this week that it was closing its factory in Kent, in the southeast of England, with the loss of 2,400 jobs.

Despite the dismal growth figures, experts refrain from predicting a return to recession, holding out for more positive news in the next quarter.

But the disappointing performance of the economy has only fuelled concerns among Cameron's critics, notably the opposition Labour party, which has accused him of killing off the recovery.

Labour leader Ed Miliband accused Finance Minister George Osborne recently of taking "a political gamble with the nation's economy", saying his strategy was all about cutting the deficit, not creating jobs.

Other voices are also calling for the government to prepare a "Plan B" in case the economy takes a dive, with the business-friendly Financial Times among those urging Osborne to be flexible.

While campaigning for last year's elections, Cameron developed the concept of the "Big Society" where community groups and volunteers would take over local services from the state -- an idea that fit neatly with the cuts.

But the concept was dealt a blow this week when Liverpool council in northwest England announced it was pulling out of a pilot scheme for the project because the cuts were hitting those same community groups too hard.

The trade unions, meanwhile, are organising a national day of action for March 26 and warning that widespread strike action is possible.

Students have already taken to the streets, engaging in violent protests at the end of last year over cuts to higher education funding.

At the World Economic Forum in Davos last month, Cameron defended his plan, pointing to the cuts as the reason why Britain's triple A credit rating had been maintained and the interest rates on the country's debt were falling.

"It's going to be tough, but we must see it through," he said.

© 2011 AFP

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