More cuts expected as Osbourne looks towards a year of ‘hard truths’

Speaking in Birmingham on January 6, Osborne said it would be necessary to make £60bn of further cuts over the next four years in order to support the economic recovery.

“We’ve got to make more cuts. £17 billion this coming year. £20 billion next year. And over £25 billion further across the two years after.”

Warning welfare could not be protected from further substantial reductions, the chancellor said £12bn of further welfare cuts might be necessary in the first two years of the next Parliament.

The Chancellor said: “When I took this job, Britain was borrowing more than £400 million every single day to pay for government spending. But 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.

“There is still a long way to go – and there are big, underlying problems we have to fix in our economy. More repairs. More cuts. More difficult decisions,” Osborne added.

“We have a choice in 2014: We can give up, go back to square one, risk everything. Or we can confront the hard truth that more difficult decisions are needed – and work through the plan that is turning Britain around.”

Trade union GMB urged Osborne to improve wage levels and construct more affordable houses in order to support economic recovery. Paul Kenny, GMB general secretary, said: “Allowing councils to build enough houses at affordable rents would save billions from the £23bn per year paid in housing benefits, much of it to private landlords.”

Shadow chief secretary to the Treasury Chris Leslie said: “George Osborne should admit his policies have failed and led to a cost-of-living crisis.

“While millions of ordinary working people are worse off under the Tories, he and David Cameron are paving the way for yet another top rate tax cut for millionaires.

“The reason more spending cuts are needed after 2015 is because his failure on growth and living standards since 2010 has led to his failure to balance the books.”