Sunday, February 26, 2012
If Britain were Greece ....
Posted by David Smith at 10:30 AM
Category: Thoughts and responses

Radio 4's Broadcasting House asked me to imagine the consequences of Greek austerity, if translated to Britain. This is what I said:

If Britain were Greece ….

We would be in the middle of the longest and deepest recession in the modern era, much worse than the Depression years of the 1930s, with no end in sight.
Unemployment would be nearly 7 million, more than a fifth of the workforce, 2.5 million of it among young people. Half of our young people would be out of work.

If Britain were Greece ….

Workers, particularly low-paid workers, would be about to be hit by a lot of pain. The minimum wage would be cut from £6.08 to £4.74, while the rate for young people would be cut from £4.98 to £3.39.
More than 100,000 public sector workers would be put into “reserve” – a waiting room for redundancy – and their salaries immediately cut by 40%. Well over a million public employees would be sacked by 2015. All public sector workers would see their wages, not just frozen, but cut sharply.

If Britain were Greece …

VAT would got up to 24%, we’d pay a “solidarity” levy of up to 5% of income, and new taxes on property. Alcohol and tobacco duties would go up by a third and we’d pay roughly £2 a litre for petrol and diesel: £120 to fill the tank of a family saloon. Anybody with a yacht or luxury car would pay extra tax on it.

People with a state or public sector pension above £800 a month would see it cut by 20%. Anybody with a pension above that level who had retired before the age of 55 would see it cut by 40%. Early retirement would become a thing of the past. The equivalent of Greece’s retirement age increase in Britain would be a rise in the state pension age to well over 70. All state benefits would be cut for years and be strictly means-tested..

If Britain were Greece ….

The defence budget would be slashed by a fifth – in cash – drastically reducing the number of military personnel and making it hard to maintain the army, navy and air force as viable separate services. NHS spending, instead of being ringfenced, would drop by a sixth. Treatments would be withdrawn, dozens of hospitals would be cut and tens of thousands of medical staff would lose their jobs. Education spending would not escape the axe, necessitating the merger or closure of thousands of schools and huge redundancies among teachers and support staff.

If Britain were Greece ….

We wouldn’t even have the weather to ease the gloom.