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The British Bust: The pain of austerity measures has yet to reach the public

Manchester will have to cut thousands of local government employees

Outside Salford Town Hall, Patricia Horn is stamping her feet to keep warm. She has never walked a union line and hasn't dressed properly. She has worked as support staff at GMP for 25 years. Her husband is a policeman and will be taking the buyout. While he retrains, they need a steady paycheck. Horn confesses she was initially tempted to join him but then was offered "7,655 pounds severance ($12,400) — around four months pay. That's not much for 25 years, is it? So I'm hoping I'll be kept on."

Labour MP Tony Lloyd watches the scene and shakes his head. The Conservative-led coalition government's insistence on draconian cuts to eliminate the country's structural deficit in four years is unprecedented, and in his view unnecessary and highly risky. The Labour party’s platform in last May’s general election, in contrast, called for halving the deficit in four years, then waiting for recovery to reach the stage where jobs are being created before reducing the deficit further.

Lloyd can't understand why the government is taking this huge risk, the only explanation he can come up with is, "Britain is conducting an experiment on behalf of the U.S. in shrinking the state. We've been here before, in the days of Margaret Thatcher and Ronald Reagan."

There are no sacred cows for the coalition's cutters. Law and order, for one, is a Conservative issue. Cutting back the number of bobbies on the beat won't please the party's core supporters.

"This is a dangerous area for them," said Lloyd, "cutting back on policing. After the National Health Service it is the most totemic public service."

The British military is also a traditional Conservative totem. But Cameron and co. are wielding the scalpel even there, despite the ongoing war in Afghanistan. Eleven thousand armed forces personnel will be laid off. One hundred Royal Air Force jet pilot recruits, many of whom were nearing the end of their expensive training, have already received their pink slips. Britain's defence secretary last week was forced to make a statement guaranteeing that troops returning from Afghanistan would not immediately be handed their walking papers.

Even the iconic aircraft carrier, the Ark Royal, has been de-commissioned.

At Salford Town Hall, the picketers have been invited inside to address a meeting of the Greater Manchester Police board. Jim Moodie, the Unison rep for GMP's civilian workers gets up. He expresses sympathy for the board members who have to decide who to lay off. "The cuts you are being asked to make go far too deep, far too quickly."

Moodie suggests using the cash reserves from local council funding that accountants always insist are kept on hand for a rainy day. "The rainy day has arrived," Moodie tells the board. He reminds them that it will cost 13.9 million pounds ($22.7 million) to lay people off. "Use that money to buy time. Pay people to re-train before re-deploying them."

The board is polite but the die has been cast. There is no way to push back at the British government's plans, says Chief Constable Fahy, "So long as the politicians have an appetite for risk."

So far there is no reason for Cameron and his cabinet to feel concerned about the risk they are taking not just with British economy, but with people's livelihoods, acknowledges Tony Lloyd. "Right now austerity is an abstract to most people but as cuts begin to bite ... the situation won't become real until people begin to see fewer uniforms on the street." He could add and libraries close down, and home visits by nurses and social workers to the elderly and infirm cease.

But that won't begin to happen until April, so the party in Manchester can continue for a little while yet.

Read The British Bust, Part II on whether Manchester can use the same tricks it has in the past to recover from economic recession.