George Osborne targets £25bn of fresh spending cuts

[dutchman]

George Osborne on Monday warned that £25bn of public spending cuts would be needed after the election to close Britain’s deficit, including £12bn in further cuts to the welfare budget in the first two years after the vote.



The chancellor’s comments are intended to frame the political debate leading into the 2015 election, as he tries to portray the Tories as the only party capable of taking tough decisions on the deficit.

It is the first time Mr Osborne has publicly put numbers on the cuts he intends to implement if the Tories are re-elected, although the scale of his challenge is clear from official data.

The chancellor insists he can close the remaining hole in Britain’s structural deficit through spending cuts alone, with the heaviest burden expected to fall on the welfare budget.

“There are no easy options here if we’re to fix our country’s problems and not leave debts to our children,” Mr Osborne said in a speech in the Midlands.

“It’s far too soon to say ‘job done’. It’s not even half done. That’s why 2014 is the year of hard truths.

“Britain is on the rise, the economy is doing better. I just want to make sure we don’t squander what we’ve achieved and go back to square one.”

He said the £12bn figure in proposed welfare cuts during the first two years of the next parliament was based on the Treasury’s current forecast.

Nick Clegg, the deputy prime minister, attacked the Conservatives for being “extreme” and “unfair” in their proposals to cut another £12bn from the welfare bill in the next parliament.

Speaking at his monthly press conference, Mr Clegg said: “It is simply not serious politics by the Conservative party to say we are so reluctant to make the wealthiest in society make even a smidgen of a contribution that we are going to ask all sacrifices to come from the working-aged poor. Not only is it unrealistic, it is unfair and reveals something about the Conservatives’ values.”

Instead, Mr Clegg said he would push for tax rises to constitute up to a quarter of the fiscal consolidation that would happen in the next parliament. That could add up to more than £6bn in tax rises, only a fraction of which would be contributed by the Liberal Democrats’ stated policy of a “mansion tax” on properties worth more than £2m.

Ed Balls, the shadow chancellor, accused the chancellor of being “desperate to stop talking about the cost-of-living crisis on his watch”.

“But that won’t stop working people from doing so as they are on average £1,600 a year worse off under the Tories and prices are still rising faster than wages,” he said in a statement.

Mr Balls added that Mr Osborne was refusing to accept “the reason he is being forced to make more cuts is because his failure on growth and living standards has led to his failure to balance the books by 2015”.

He acknowledged that if Labour won the 2015 election it “will have to make cuts and in 2015/16 there will be no more borrowing for day-to-day spending”.

“But we will get the deficit down in a fair way, not give tax cuts to millionaires,” he said. “And we know that the way to mitigate the scale of the cuts needed is to earn and grow our way to higher living standards for all.”