Britain’s coalition government has already had a remarkably busy new year on the economic front, with announcements about wholesale changes to the country’s financial map. The man largely at the center of all of this is Chancellor of the Exchequer George Osborne. Coming off a banner 2013 in which The Times named him “Briton of the year,” he has moved from topic to topic and done more to shape the look of his Conservative Party in recent months than even the prime minister, David Cameron. Among other things, he has proposed a £25 billion spending cut, given the European Union a stern talking to about reform and, most recently, promoted a minimum wage increase.

Osborne started January by warning that 2014 will be a “year of hard truths” and he promptly infuriated many of his Liberal Democrat coalition partners by proposing a £12 billion cut for housing benefits to Britons under the age of 25 and recipients otherwise too wealthy to receive government subsidies.

While cutting housing benefits is not a bad idea in and of itself, it fails to address the largest component of government welfare spending — pensions. Indeed, pensioners receive 50 percent of the country’s entire welfare budget but have been declared off limits for spending cuts.

Osborne’s plan also takes a narrow view of opportunities for budget cuts, failing to focus on the raft of government spending earmarked for other projects and programs, such as developmental aid — a fact pointed out by London’s Conservative Party mayor, Boris Johnson. (more…)