Britain moves ahead with deficit-cutting
Commuters make their way onto an Underground tube station at Oxford Circus on in London, England. A 24-hour strike by Tube staff belonging to the RMT and TSSA unions in protest over plans to axe 800 station managerial jobs and ticket office staff is due to commence this evening disrupting rush hour commuters across the capital.
TEXT OF INTERVIEW
STEVE CHIOTAKIS: Britain's deficit-cutting plan has been given the green light from the credit rating agency Fitch. It says the U.K.'s triple-A credit rating is safe, at least for the time being. Marketplace's Stephen Beard is with us live from London with the latest. Hi Stephen.
STEPHEN BEARD: Hello Steve.
CHIOTAKIS: Remind us of the size of these budget cuts.
BEARD: $130 billion is to be cut out of the U.K. budget over the next four years. This is a huge sum for Britain. It equates roughly to a total of about 6 percent of the U.K.'s GDP. Just to give you an example of what it will mean, half-a-million jobs will be lopped off the public sector payroll. Some critics of course fear this could plunge the U.K. back into recession. But David Riley of Fitch says these planned cuts have secured the U.K.'s triple-A credit rating. Without these drastic measures, he says things could've been bad for Britain.
DAVID RILEY: The debt would've continued to rise at a very rapid pace, and certainly in our assessment, its rating would've come under pressure and it would've had to pay a higher cost in terms of borrowing.
CHIOTAKIS: So Fitch, Stephen, approves of these budget cuts, but there must be people opposed, right?
BEARD: Oh yes, there's been a lot of adverse reaction. Some social charities have angrily attacked the cuts as bearing down too heavily on the poor, and the leader of the biggest union representing public sector workers has described the cuts as "a massacre." So, there must now be the possibility of strike action in protest.
CHIOTAKIS: Marketplace's Stephen Beard in London. Stephen, thank you.
BEARD: Okay, Steve.