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Britain Announces Sweeping Austerity Measures

British Chancellor of the Exchequer George Osborne (center) addresses Deputy Prime Minister Nick Clegg (second from right) and other attendees of a cabinet meeting on October 20, ahead of the announcement of drastic spending cuts.
The British government has unveiled the largest cuts to public spending since World War II in a bid to bring its huge debt burden under control.

The five-year austerity program will cost the nation the loss of half a million public-sector jobs, and will slash social benefits for many millions of Britons.

Chancellor of the Exchequer George Osborne gave details of the austerity drive aimed at reducing Britain's public debt from a massive and ultimately unsustainable 11 percent of gross domestic product to 2 percent by 2015.

It raises taxes, cuts numerous social benefits to millions, sheds up to half a million public-sector jobs, cuts budgets for government departments, and transfers the onus to create new jobs onto the private sector. It is meant to save $130 billion.

Osborne told the House of Commons that Britain is "stepping back from the brink."

"We are going to bring the years of ever rising borrowing to an end," Osborne said. "We are going to ensure, like every solvent household in the country, that what we buy, we can afford, that the bills we incur we have the income to meet, and that we do not saddle our children with the interest on the interest on the interest of the debts that we were not prepared, ourselves, to pay."

Before the announcement, the National Statistics Office said Britain's public deficit rose to 20.7 billion pounds ($32.5 billion) in September, a record high.

Apart from being a cost-cutting measure, the austerity program reflects the belief of conservative Prime Minister David Cameron that the present circumstances offer a unique chance to reduce government's involvement in many aspects of national life.

In this, it is ideologically aligned with the thinking of former Prime Minister Margaret Thatcher, who carried out a swingeing program to cut government presence in the economy in the 1980s.

But Cameron, who has led a frail ruling coalition with the Liberal Democrats since his election in May, has taken great care to spread the burden of the cuts across all sections of the community.

For instance, child-care benefits will be stopped to about 12 million households. But those are middle-class people with solid incomes; the poorer sections of society will continue to receive the benefits.

Only two areas of spending are being protected, namely the National Health Service and international aid.

The opposition Labour Party has criticized the austerity program as likely to throw Britain back into recession. Alan Johnson, Labour's spokesman on economic issues, said the cuts would trap the country in a cycle of low growth and high unemployment for years.

French Resistance

Meanwhile, in France strikes continue to protest the pension reform plans of President Nicolas Sarkozy, a key part of his reforms designed to reduce public expenditure.

French attention focuses on the growing shortage of oil and petrol around the country. The Interior Ministry said police during the night had ended the worker blockade of three major fuel distribution depots.

Charles Foulard, of the CGT labor union, criticized the police action as repressive.

"It seems to me that Mr. Sarkozy is starting to act as if we were in a police state, repressing a social movement by force," Foulard said. "The arrival of 20 riot police vans at the Donges refinery, which is being blockaded by strikers from the refinery, is a testimony to the fact that the constitutional right to strike is being trodden on by police repression, under Mr Sarkozy's boot."

The Interior Ministry said millions of liters of petrol are now being distributed from the retaken depots. Some 4,000 of France's petrol stations are estimated running dry.

written by Breffni O'Rourke based on agency reports