Socialist Worker

Spending cuts will be severe

Issue No. 2153

The wolves of international finance are circling around Gordon Brown’s government.

Last week the International Monetary Fund demanded a “more ambitious” timetable of cuts in public spending to reduce Britain’s budget deficit. It warned that Britain could face a “severe shock” if such cuts were not made.

But chancellor Alistair Darling has already proposed to introduce the most severe cuts in public spending in 30 years, over the next decade.

Headlines last week announced that Britain’s international credit rating was about to be cut.

But few pointed out that Standard & Poor’s, the rating agency issuing this warning, bears some responsibility for the current financial crisis.

It woefully failed to notice that Iceland’s banks were about to go bust last year.

Standard & Poor’s has not yet cut Britain’s rating – it is waiting to see the outcome of the next general election.

It said, “The rating could be lowered if we conclude that, following the election, the next government’s fiscal consolidation plans are unlikely to put the UK debt burden on a secure downward trajectory over the medium term.”

International finance clearly scents that David Cameron will enter Downing Street after the next election and is demanding he delivers in full on his pledge that he will oversee an “age of austerity”.

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Tue 26 May 2009, 18:19 BST
Issue No. 2153
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