” The pain of cutting Britain’s national deficit will be worse than previously feared and will affect everyone in the country, Prime Minister David Cameron said on Monday.
Laying out the reasons for squeezing spending, Mr. Cameron said the nation cannot avoid cutting a deficit which rose to 156 billion pounds ($225 billion) in the last fiscal year.
He has suggested that welfare programs and expenditure for civil servants are high on the list of possible cuts and confirmed that the capital gains tax would go up, but otherwise gave no fresh details.
Instead, he concentrated on explaining why he believes drastic action is required {hbox}” and placing the blame on the Labour Party governments of the previous 13 years.
“The overall scale of the problem is even worse than we thought ...,” said Mr. Cameron, who came to power last month at the head of Conservative—Liberal Democrat coalition.
“Its potential consequences are therefore more critical than we feared,” he added.
Emergency budget on June 22
His government intends to announce an emergency budget on June 22 that will lay out the first steps in cutting the deficit, with more decisions to come later in the year.
“How we deal with these things will affect our economy, our society ” indeed our whole way of life,” Mr. Cameron said in his speech in Milton Keynes, 50 miles (80kms) north of London.
“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.”
Mr. Cameron said action is needed now to prevent interest rates from rising, hitting every mortgage holder in the country. Higher interest rates would also divert more tax money into repaying debt rather than providing services, he says.
“I think people understand by now that the debt crisis is the legacy of the last government. But exactly the same applies to the action we will need to take to deal with it. If there are cuts they are part of that legacy,” Mr. Cameron said.
' Tough measures inevitable '
“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.”
Mr. Cameron said public spending had increased by 15 percent since 2007, and public sector employment rose which private sector employment shrank.
“So while the people employed by the taxpayer were insulated from the harsh realities of the recession everyone else in the economy was paying the price,” Mr. Cameron said.
