Another socialist country is in huge economic trouble. Obama and the liberals should take note...
"David Cameron on Monday warned that public sector pay, pensions and state benefits would face a squeeze as he prepared the country for the "enormous implications" of dealing with the £156 billion ($225 billion) deficit.
With just over two weeks until the Budget, Cameron promised an unprecedented level of public and business consultation before unleashing cuts that would hit "every single person in our country."
Answering questions at the Open University in Milton Keynes, he said: "It will inevitably mean difficult decisions in large areas of spending, like pay, pensions and benefits."
Cameron claimed that Britain would be paying £70 billion ($101 billion) a year to service its debt within five years unless action was taken, and said that Greece served as an example of what happened when fiscal crises developed unchecked.
"This is worse than anything people have had to deal with before," he said.
British Finance Minister George Osborne will say on Tuesday that he is looking at the possible creation of a Canadian-style "star chamber" of senior ministers and officials to grill cabinet members on their proposed spending plans.
Meanwhile, Lord Browne, former BP chief executive, has been approached to head a team of corporate heavy hitters brought in to advise on the Whitehall shake-up, although Downing Street said his appointment had not yet been confirmed.
"Anyone who thinks the spending review is just about saving money is missing the point," said a Treasury official. "This is a once-in-a-generation opportunity to transform the way that government works.",
The moves are part of a carefully choreographed strategy leading up to the June 22 Budget, in which Osborne will set the framework for cutting the deficit and prepare for this autumn's departmental spending review.
Over the next fortnight he will publish independent forecasts by the new Office for Budget Responsibility, which are expected sharply to downgrade the Treasury's 3.25 percent growth forecast for 2011.
Cameron gave a foretaste of the likely conclusion when he said: "The overall scale of the problem is even worse than we thought."
The bleak rhetoric is an implicit recognition in government that politicians of all parties failed before the election to prepare the public for what Cameron described in The Sunday Times as a period of "pain."
While the election campaign saw skirmishes about whether £6 billion ($8.6 billion) should be cut this year, Cameron is now preparing the public for cuts that will hit all sections of society and include a squeeze on welfare.
Nick Clegg, Liberal Democrat deputy prime minister, promised that the cuts would be "progressive" and avoid creating the divisions of the 1980s, when Margaret Thatcher's government applied harsh economic medicine.
Cameron echoed that sentiment when he said: "As we deal with the debt crisis, we must take the whole country with us."
Osborne sees the next few days as crucial to turning Britain's rhetoric in favor of sound public finances into action. He was delighted by a change of tone at the G20 meeting of finance ministers in South Korea, which ditched the mantra of fiscal stimulus as a route to economic recovery.
"We've achieved a significant success in getting G20 endorsement for the British government's position," he told journalists. He was particularly pleased that the G20 communiqué welcomed "the recent announcements by some countries to reduce their deficits in 2010 and strengthen their fiscal framework and institutions.""
Source:
http://www.cnn.com/2010/BUSINESS/06/....ft/index.html