The world is watching as the UK seeks to correct its economy. George Osborne has issued a plan to cut government spending by 81 billion pounds. He has said he will stick to the plan and there will be no compromises.
The four year plan calls for government departmental budget cuts, an overhaul to welfare, and the associated cuts will mean job losses. While the cuts are seen as necessary, many economists have warned the plan needs to be flexible as the economy responds.
The Institute for Fiscal Studies, an independent economic think tank, is one of those issuing warning when it comes to the Chancellor’s budget cuts. They have stated that the plan should be reviewed in two years.
However, Mr. Osborne in an interview with BBC Radio Four made it clear the plan is set and will be followed through. In the interview, Osborne said: “People say ‘Where’s your plan B?’ I’ve got a Plan A, which is a pretty good situation. We’ve got the plan.
“This is the plan we’ve set out. The country needs a decisive plan.
“There is of course the freedom for the Bank of England to deploy monetary policy tools as well.”
Osborne is referring to the fact that the Bank of England can taking correcting measures of their own should another recession loom.
The cuts have come under heavy criticism that the poor will be hit the hardest and will find themselves in very critical situations, where as those more well off will be faced with a less harsh reality. Osborne stated that he has made efforts to protect the interests of health, benefit aid, and schools.
He added: “I have chosen in part to pay for that by trying to curb the rise in the benefits bill. That has involved some hard choices but I think they are fair choices. We have got to put the welfare state on a sustainable footing.”