British PM warns of 'painful' cuts to tackle debt

7th June 2010, Comments 0 comments

New Prime Minister David Cameron said Monday the state of Britain's finances was "even worse than we thought" as he warned of "painful" and unavoidable cuts to tackle the record deficit.

Cameron lambasted the Labour administrations of premiers Tony Blair and Gordon Brown, saying their "total irresponsibility" had left a "terrible" legacy that meant everyone's lives would be affected by the cutbacks.

In a keynote speech laying out the scale of Britain's "debt crisis", Cameron said if urgent action was not taken, the consequences would be much worse as interest payments stacked up.

Cameron's new Conservative-Liberal Democrat coalition, in office for one month, is to present an emergency budget on June 22 as it bids to tackle the deficit.

"Today, our national debt stands at 770 billion pounds (1.12 trillion dollars, 930 billion euros)," Cameron told an audience in Milton Keynes, southern England.

"Within just five years it is set to nearly double, to 1.4 trillion pounds. That is some 22,000 pounds for every man, woman and child in the country."

The Conservative leader said if no action was taken, Britain would be paying a "staggering" 70 billion pounds a year interest on its debt by 2015.

Such interest payments would account for 10 percent of people's tax bills, Cameron said.

"Is that what people work so hard for, that their taxes are blown on interest payments on the national debt? What a terrible, terrible waste of money," he said.

Cameron's administration has already unveiled plans to cut 6.25 billion pounds this year, and further austerity measures are expected in finance minister George Osborne's budget.

"The overall scale of the problem is even worse than we thought," Cameron said, having had nearly a month in office to study the books.

"How we deal with these things will affect our economy, our society -- indeed our whole way of life.

"The decisions we make will affect every single person in our country. And the effects of those decisions will stay with us for years, perhaps decades, to come.

"Around the world people and their governments are waking up to the dangers of not dealing with their debts. And Britain must be part of that international mainstream."

He accused Labour, in power from 1997, of ratcheting up unaffordable government spending on the public sector as the private sector shrank.

"We're going to have to get it back in line -- and that will be much more painful than if we had kept things properly in balance all along," he said.

"The debt crisis is the legacy of the last government... if there are cuts, they are part of that legacy.

"Because the legacy we have been left is so bad, the measures to deal with it will be unavoidably tough. But people's lives will be worse unless we do something now."

© 2010 AFP

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