Osborne determined on public spending cuts

Chancellor of the Exchequer George Osborne says he is determined to press ahead with the government’s multi-billion programme of public spending cuts, declaring: “We have to see this through”.

Mr Osborne is expected to outline the most savage reductions in state spending since the World War II when he unveils his Comprehensive Spending Review (CSR) on Wednesday, slashing £83 billion from Whitehall budgets as he bids to eliminate the structural deficit within four years.

He said that the CSR would aim to squeeze welfare payments and Government waste as hard as possible, in order to preserve cash for healthcare, schools, early-years education and crucial infrastructure projects, like London’s Crossrail link, the proposed Mersey Gateway road bridge and the Diamond Synchrotron scientific facility in Oxfordshire.

Mr Osborne declined to discuss press reports that he will save billions by cutting thousands of police officers and abolishing Child Benefit for 16-19 year-olds, currently paid to teenagers who stay on in education or training.

He told BBC1’s Andrew Marr Show: “The priority has been to target waste and welfare, to invest in our healthcare, to have real increases in our school budgets and to invest in the things that are going to make our economy strong...

“We have got to make some tough decisions but the priority is healthcare, children’s education, early years provision – particularly for some of our poorest – and the big infrastructure developments like Crossrail, Mersey Gateway, the synchrotron, broadband.

“Those things are actually going to get us out of this stronger and able to pay our way in the world.”

Mr Osborne was accused of “economic masochism” by shadow chancellor Alan Johnson, who said the coalition Government was planning to cut “too deeply and too quickly” and was risking a lengthy period of stagnation with the economy “bumping along the bottom”.

But the Chancellor insisted he would not shy away from the cuts he believes are necessary to avoid a crisis of confidence in Britain’s economy which could drive up interest rates. Repeat benefit cheats will have their welfare payments halted for up to three years as part of a tough new crackdown announced by Chancellor George Osborne yesterday.

And the Chancellor said that every wrongful claim for benefits - including avoidable errors made when filling out forms – will in future be punished by a £50 fine.

Comparing the cheats to muggers robbing taxpayers of their hard-earned money, Mr Osborne said Britain “can’t afford to waste any more time” in reducing a £5 billion annual bill for fraud and error in the benefit and tax credit system.

The new crackdown, to be formally launched today, will include mobile hit squads of inspectors being sent to areas where the problem is rife. A “three-strikes-and-you’re-out” rule will strip repeat offenders of benefits for up to three years.

And some 200 additional inspectors are to be recruited to a new investigation service, which will detect the patterns of fraudulent activities by looking at shared data from government offices and credit reference agencies.

Investigators will also aim to seize more of the assets of those found guilty of benefit fraud.

Mr Osborne told BBC1’s Andrew Marr Show that the tough new rules were “perfectly reasonable”, adding: “We have a benefits system. I want it to be on a sustainable footing for the long term, but it has to go to the people who need it, because the people who pay for it demand no less.”

The Chancellor has said that bringing down the welfare Bill will play a crucial role in easing the impact of state spending cuts as he tries to pay down Britain’s structural deficit over the coming four years.

Fraud in the benefit and tax credit system is estimated to cost the taxpayer around £1.5 billion a year, while a further £3.5 billion is accounted for by errors by officials or claimants.

Mr Osborne told the News of the World: “This is a fight. We are really going to go after the welfare cheats. Frankly, a welfare cheat is no different from someone who comes up and robs you in the street. It’s your money.”