06.01.14
Osborne announces £25bn more public spending cuts to come
Public spending cuts totalling £25bn will be needed after the next general election to cut the deficit, Chancellor George Osborne has warned, despite the brightening economic outlook and rising business confidence.
It is the first time he has put a precise number on the expected cuts, which Osborne said that under a Conservative government would focus heavily on welfare, rather than departmental budget cuts.
Osborne suggested that scrapping housing benefit for under-25s and restricting council housing for those earning over £65,000 a year could help to achieve the necessary cuts. Speaking during an interview with BBC Radio 4’s Today programme, he said cutting universal benefits for pensioners, which go to wealthy older people as well as those in need, such as the free TV licence, bus travel, and the winter fuel allowance, would not be a good way of finding the money and would be the wrong priority.
Labour warned that the government was creating a living standards crisis.
In his speech later Mr Osborne is expected to warn: “As a result of the painful cuts we've made, the deficit is down by a third and we're borrowing nearly £3,000 less for every one of you and for every family in the country. That's the good news. The bad news is there's still a long way to go.
“We've got to make more cuts. That's why 2014 is the year of hard truths – the year when Britain faces a choice.
“Do we say 'the worst is over, back we go to our bad habits of borrowing and spending and living beyond our means and let the next generation pay the bill'?
“Or do we say to ourselves 'yes, because of our plan, things are getting better - but there is still a long way to go and there are big, underlying problems we have to fix in our economy'?”
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Image c. M. Holland