UK takes axe to spending

London

 British finance minister George Osborne unveiled fresh austerity measures yesterday to slash debt, evoking the plight of crisis-hit Greece in the first purely Conservative budget for almost two decades.

Chancellor of the Exchequer Osborne drastically cut welfare spending to honour campaign promises after his Conservative party -- headed by Prime Minister David Cameron -- unexpectedly won an outright majority in a May 7 general election.

Osborne said welfare spending would be slashed by £12 billion ($18.4bn, 16.6bn euros) by the end of the current parliament in five years' time.  At the same time, the government will introduce a "national living wage" that could reach £9.0 an hour by 2020 that will be for workers only aged 25 and over. That compares with the current national minimum wage of £6.50 an hour for those aged 21 and over, which will continue to exist alongside the living wage.

"This is a Conservative budget that can only be delivered because the British people trusts us to finish the job," said Osborne, who has a free hand with the public finances after a tense five-year coalition with the centrist Liberal Democrats. But he cautioned: "The greatest mistake this country could make is to think all our problems are solved." 

"You only have to look at the crisis in Greece to realise if a country is not in control of the borrowing, the borrowing takes control of the country," Osborne told lawmakers in his post-election budget statement to parliament.

Harriet Harman, interim leader of the opposition Labour party, slammed Osborne's budget for "making people worse off" by also axing grants for the poorest university students and capping family benefits.

However, the chancellor insisted the budget would transport Britain "from a low wage, high tax, high welfare economy, to the higher wage, lower tax, lower welfare country we intend to create".