U.K. Needs Extra GBP 25 Bln Spending Cuts After 2015 Election, Osborne Says

(RTTNews) - The British government should cut spending by another GBP 25 billion over two years after the 2015 general election, Chancellor George Osborne said in a speech in Birmingham on Monday.

The government needs to reduce spending by GBP 17 billion this year and GBP 20 billion next year.

According to the current forecasts, GBP 12 billion of further welfare cuts are needed in the first two years of next Parliament, he said.

"That's how to reduce the deficit without even faster cuts to government departments, or big tax rises on people," said Osborne.

"Even after we've reduced the amount we borrow each year, that still leaves us with a high debt from all the past borrowing," Osborne said.

"There is still a long way to go - and there are big, underlying problems we have to fix in our economy," he added.

If the government cuts people's taxes permanently, then it should be done by permanently cutting the spending those taxes pay for.

The nation should do even more to encourage the exports and investment and saving the economy needs for a responsible recovery, he noted.

In an interview with BBC Radio 4, he suggested to make welfare savings by cutting housing benefit for under-25s and restricting council houses to those earning more than GBP 65,000 a year.