U.K. Chancellor of the Exchequer George Osborne said on Monday that the Conservative Party led government will execute a GBP 10 billion reduction in the benefits budget and further cut department spending.
The great bulk of savings must come from cutting government spending and not by increasing taxes, he told the annual Conservative Party conference in Birmingham.
This planned GBP 10 billion reduction in the welfare bill over the coming few years is over and above the GBP 18 billion cut already announced in 2010.
Osborne said, "We're reducing the size of government, from almost 50 percent of our national income to 40 percent, in just five years." It would be unrealistic to cut a great deal faster than the planned programme, he added.
Earlier in the day, the manufacturers' lobby EEF said the government should give priority to boost economic growth rather than curbing the structural deficit.
Osborne will provide an update on economic and borrowing forecasts on December 5, when he unveils the Autumn Statement.
In an interview with Sky News in Birmingham, Osborne reportedly said that austerity will have to be continued beyond the election in 2015. According to an analysis by the Financial Times newspaper, austerity may last until 2018.
The chancellor claimed that the rich will pay a greater share of nation's tax revenues in every year of this Parliament than in any one of the thirteen years that Labour were in office.
Prime Minister David Cameron in an interview with BBC said yesterday that the government will take further action to ensure rich people pay their fair share. But he ruled out a tax for expensive properties, which is called the 'mansion tax'.
Osborne said he and the Work and Pensions Secretary Iain Duncan Smith are committed to finding welfare savings, while delivering the most radical reform of the welfare system.
Further, the chancellor said the government is consulting on a generous new tax regime for shale so that Britain is not left behind as gas prices tumble on the other side of the Atlantic.
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