UK unveils austerity plan unprecedented

The United Kingdom came Tuesday in an era of stringency, the Chancellor Osborne has announced an unprecedented austerity plan designed to generate tens of billions of euros in savings over 5 years to eliminate almost all of budget deficit left by Labour.

The coalition government formed last month by the Conservatives and Liberal Democrats "has inherited the largest budget deficit in Europe in absolute terms, and" this budget is needed to restore confidence in our economy, "argued the Chancellor of the Exchequer George Osborne, presenting his first budget to Parliament.

He unveiled a package of measures to eliminate the deficit completely called "structural" over five years, that is to say the duration of the legislature.The structural deficit is the part of the government deficit which is not related to temporary difficulties in the economy, and therefore does not go away automatically with the recovery.The reduction will require "structural reforms", such as reducing state intervention in certain areas or reduce the number of officials.

The total deficit should be narrowed down to 149 billion pounds (179 billion euros), equivalent to 10.1% of gross domestic product, in fiscal year started in April, only 20 billion pounds in 2015/2016, or 1.1% of GDP.

Drastic reduction of public expenditure

Most of this reduction, which represent a tightening of 40 billion pounds a year older, at the end of the term, provided that what the Labour Party, will come to an unprecedented reduction in public spending.

The budget of each department will decline from 25% on average over four years, except those in health and development assistance, which will be "ringfenced".The precise distribution of these cuts will be announced this fall.

Officials will have to tighten the belt, with a wage freeze for two years except for the smallest, and a hardening of their pension plan.

On the revenue side, the VAT will increase from 17.5 to 20% in January.The tax on gains from capital will swell immediately, and banks, after receiving massive bailout plans in the Labour Party, will go to the cashier, with the introduction next year of a tax that should generate Term 2.4 billion euros per year.

Even Queen Elizabeth will make efforts, a freeze on 9.5 million Euros from its "civil list", the envelope that the state pays for its official duties.

But alongside the Chancellor Osborne has announced a reform of the income tax, which was defended vigorously by the Liberal Democrats on behalf of social justice, and will allow to exempt nearly 900,000 low-income households. He also cared for businesses with targeted measures.

The opposition denounced a budget "bad for growth"

The opposition has strongly criticized this budget.Harriet Harman, who heads the Labour Party pending the election of a successor to Gordon Brown, has denounced "the same old Tories, severely affecting the most vulnerable. She also denounced a budget "bad for growth", emphasizing that the OBR, Constable of public finances, was lowered from 2.6% to 2.3% the official forecast for growth next year, following this budget.

In the City, investors welcomed the ads, dating the book above 1.20 euros, but economists have shown mixed. James Knightley of ING was concerned about the magnitude higher than expected this fiscal tightening, "a painful process that will limit growth, while Paul Robinson of Barclays Capital, has welcomed a budget sufficient clever, "which includes" various measures to limit the impact on the less affluent. "

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