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British Open Economic Debate Ahead of 2015 Election British Economic Debate Opens Ahead of 2015 Vote
(about 3 hours later)
LONDON — With elections 16 months away, British politicians have headed into battle over the economy.LONDON — With elections 16 months away, British politicians have headed into battle over the economy.
The chancellor of the Exchequer, George Osborne, on Monday promised more austerity and further welfare cuts while warning that the task of repairing government finances was “not even half-done.” The chancellor of the Exchequer, George Osborne, on Monday promised more austerity and further welfare cuts while warning that the task of repairing government finances was “not even half done.”
That vow followed a call on Sunday by Ed Miliband, the Labour leader and head of the opposition, for better protection for low-wage workers.That vow followed a call on Sunday by Ed Miliband, the Labour leader and head of the opposition, for better protection for low-wage workers.
Only a year ago, Britain faced the risk of a return to recession, and Mr. Osborne’s austerity program was getting much of the blame. But Britain is now expected to be one of the fastest growing advanced economies in 2014, and that turnaround has left political parties scrambling for advantage at the start of the new year. Only a year ago, Britain faced the risk of a return to recession, and Mr. Osborne’s austerity program was getting much of the blame. But Britain is now expected to be one of the fastest-growing advanced economies in 2014, and that turnaround has left political parties scrambling for advantage at the start of the new year.
While the economic uptick is good news for the Conservative government, led by Prime Minister David Cameron, Mr. Osborne warned against a “dangerous new complacency,” arguing that, if given the chance, the opposition Labour Party would squander the gains made rather than consolidate them.While the economic uptick is good news for the Conservative government, led by Prime Minister David Cameron, Mr. Osborne warned against a “dangerous new complacency,” arguing that, if given the chance, the opposition Labour Party would squander the gains made rather than consolidate them.
Despite its claims that austerity has laid the foundation for recovery, the government was put on the defensive late last year when the Labour Party campaigned over the cost-of-living squeeze felt by many voters whose pay increases have lagged behind big jumps in energy and other bills.Despite its claims that austerity has laid the foundation for recovery, the government was put on the defensive late last year when the Labour Party campaigned over the cost-of-living squeeze felt by many voters whose pay increases have lagged behind big jumps in energy and other bills.
Mr. Miliband, writing in the Independent newspaper on Sunday, called for tougher action against unscrupulous firms that he said exploit cheap labor. Mr. Miliband, writing in The Independent on Sunday, urged tougher action against unscrupulous firms that he said exploit cheap labor.
Calling for stiffer fines for companies that breach minimum wage laws and a ban on recruitment agencies hiring only foreign workers, Mr. Miliband also sought to defuse the debate over immigration and worries that workers from Eastern Europe were undercutting pay levels.Calling for stiffer fines for companies that breach minimum wage laws and a ban on recruitment agencies hiring only foreign workers, Mr. Miliband also sought to defuse the debate over immigration and worries that workers from Eastern Europe were undercutting pay levels.
“Unless we act to change our economy, low-skill immigration risks making the problems of the cost of living crisis worse for those at the sharp end,” Mr. Miliband wrote. “It isn’t prejudiced to believe that.”“Unless we act to change our economy, low-skill immigration risks making the problems of the cost of living crisis worse for those at the sharp end,” Mr. Miliband wrote. “It isn’t prejudiced to believe that.”
Mr. Osborne, speaking on Monday at a factory in Birmingham, sought to put the focus firmly back on deficit reduction, asserting that his economic program “is working,” but that an additional £25 billion in spending cuts will be needed after the next elections, due in May 2015, including £12 billion from the welfare budget. Mr. Osborne, speaking on Monday at a factory in Birmingham, sought to put the focus firmly back on deficit reduction, asserting that his economic program “is working,” but that an additional £25 billion in spending cuts, about $41 billion, would be needed after the next elections, due in May 2015, including £12 billion from the welfare budget.
The speech effectively challenged Mr. Osborne’s opponents to say whether they would match his target and, if so, how they would achieve it — if not through restricting welfare payments.The speech effectively challenged Mr. Osborne’s opponents to say whether they would match his target and, if so, how they would achieve it — if not through restricting welfare payments.
Mr. Osborne highlighted some potential welfare savings including cuts to housing benefits for people younger than 25, and the new restrictions on subsidized housing for those over certain salary thresholds.Mr. Osborne highlighted some potential welfare savings including cuts to housing benefits for people younger than 25, and the new restrictions on subsidized housing for those over certain salary thresholds.
Yet, on Sunday Mr. Cameron made clear that significant increases in the state pension will continue, insulating many older people from the squeeze on public spending. Political parties are wary of upsetting retired people because they tend to vote more than other age groups. Yet, on Sunday Mr. Cameron made clear that significant increases in the state pension would continue, insulating many older people from the squeeze on public spending. Political parties are wary of upsetting retired people because they tend to vote more than other age groups.
Labour countered Monday that it would focus more on growth as a way to reduce the scale of cuts. “We will get the deficit down in a fair way,” Labour’s finance spokesman, Ed Balls, said in a statement. “We know that the way to mitigate the scale of the cuts needed is to earn and grow our way to higher living standards for all.”Labour countered Monday that it would focus more on growth as a way to reduce the scale of cuts. “We will get the deficit down in a fair way,” Labour’s finance spokesman, Ed Balls, said in a statement. “We know that the way to mitigate the scale of the cuts needed is to earn and grow our way to higher living standards for all.”
Meanwhile, Nick Clegg, leader of the Liberal Democrats, the junior party in the coalition government, distanced himself from Mr. Osborne’s comments on welfare. The Conservatives are making a “monumental mistake” in a remorseless search for cuts and in focusing the burden of consolidation on the working poor, Mr. Clegg, who is deputy prime minister, said at a news conference on Monday in London.Meanwhile, Nick Clegg, leader of the Liberal Democrats, the junior party in the coalition government, distanced himself from Mr. Osborne’s comments on welfare. The Conservatives are making a “monumental mistake” in a remorseless search for cuts and in focusing the burden of consolidation on the working poor, Mr. Clegg, who is deputy prime minister, said at a news conference on Monday in London.
Although Britain’s next general election is more than a year away, elections for the European Parliament in May this year will provide an earlier test of the parties’ relative popularity with the British public. Although Britain’s next general election is more than a year away, elections for the European Parliament in May this year will provide a test of the parties’ relative popularity with the British public.
As the general election approaches, and with opinion polls pointing to an inconclusive outcome, Mr. Clegg’s party is trying to distinguish its image from that of the Conservatives.As the general election approaches, and with opinion polls pointing to an inconclusive outcome, Mr. Clegg’s party is trying to distinguish its image from that of the Conservatives.