British Prime Minister David Cameron outlined his plans to solve the country’s debt problem but has emphasised the difficult decisions that are yet to be made with regard to state pensions and benefits. In short, the Great British public are to expect widespread, deep and difficult cuts to public spending.

Cameron has described the task of tackling the UK’s debt problem in no uncertain terms and is obviously looking to instil the severity of the situation. However, he also emphasised that these cuts in public spending would not damage those at greatest risk and in greatest need of support at such a difficult time. That being said, the budget announcement cannot afford to be too divisive with respect to wage bands across the country. This alludes to a very difficult balancing act in curing the country’s financial ill health.

Up to this point, the Conservative-Lib Dem coalition have tabled a budget for the 22^nd of June, in which they are expected to build on the cuts of £6.2billion that have already been announced. Apparently, the state of the country’s finances was even worse than the new Prime Minister had imagined when taking office. In his own words, the UK is in “Debt Crisis” and he laid the blame for this situation squarely at the feet of the Labour government.

Solely in terms of interest payments on the national debt, the UK is set to spending £70billion within five years. For any of us that have been paying an interest only deal on a mortgage or been going on paying the minimum repayment amount to our credit card, the sheer waste of money will be immediately apparent. As we at Debtsolver have always reiterated, dealing with your debt as quickly and efficiently as possible will help to save you money. As ever, the sooner you face up to the problems, the easier they are to solve.

There are then the knock-on effects to consider, like increased interest rates and the general drop in the level of public services on offer, as taxes are diverted to pay the interest on our national debt. Of course, as promised in the Conservative manifesto, NHS spending and international aid will be protected for the cuts. Whether this remains viable in the long-term is yet to be seen.

In the past 5 years, we’ve seen the loss of 100,000 civil service jobs and the union Unison have viewed these public sector spending cuts as specifically targeting those on a lower income, dependent on these public service, like healthcare and financial support. Unison viewed the debt as a problem that was essentially caused by the wealthy banking and financial sectors but was set to be paid for by those that were most vulnerable.

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This entry was posted on Monday, July 19th, 2010 at 7:00 am and is filed under Debt News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.