Tory Britain: Grim, Then Grimmer

George Osborne, Britain’s Finance Minister, had a plan: First, use brutal austerity measures to rid Britain of its record budget deficit before the next election in May 2015. The hard part done, Osborne would then cut taxes, boosting the economy and opening the way for the Conservatives led by Prime Minister David Cameron to sweep into a second term.

Now that strategy is in doubt. Spending cuts will have to continue for two years beyond the election to meet the government’s deficit targets, Osborne announced in his Autumn Statement to Parliament on Nov. 29. That day, after the speech, the Office for Budget Responsibility (OBR), a nonpartisan body of economists set up after the Conservative-led coalition took office, released its prediction for gross domestic product. GDP, it said, will grow just under 1 percent this year, not the 1.7 percent expected in its March forecast, and by 0.7 percent in 2012, instead of 2.5 percent. The deficit in the five years through March 2016 will be £112 billion ($175 billion) higher than planned. The next day some 1 million state workers staged a 24-hour strike over plans to make them retire later and pay more for pensions. That raised the specter of years of labor strife as Osborne attempts the deepest budget reductions in British peacetime history.