George Osborne warns of new £25 billion welfare cuts

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George Osborne has warned of a £25bn round of spending cuts to follow the next election in an original new votewinning strategy.

The day after David Cameron suggested on the Andrew Marr show that a further cut in the top rate of tax might be on the cards, the Chancellor outlines plans to cut welfare even further. His current focus is on housing benefit for the under 25’s – perhaps assuming they still live with their parents, and restricting council housing for those earning over £65,000 a year - something that seems more reasonable.

His comments came ahead of a speech in which he is due to warn of a "year of hard truths".

Mr Osborne, who has obviously leaked his speech to the media in advance, will say: "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."

He will say that the UK was "borrowing around £100bn a year - and paying half that money a year in interest just to service our debts".

"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'?"

He then went on BBC’s Today Programme to say “We need to find a further £25 billion of cuts after the election. We have to make decisions about where of course those cuts are to be found, we have to make decisions about whether we seek them in departments or whether we seek them in the welfare budget.”

“I think we do have to look at the welfare budget because I think it would be an odd choice as a country to say, 'look we’ve got a high deficit and we’re going to deal with that by just cutting the schools budget or the science budget or something like that and to leave untouched this enormous welfare budget. That ultimately is where you can find substantial savings.”

Tax cuts for the highest earners and welfare cuts for the poorest in other words.

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