Obsorne to cut £25 bn to balance books

The UK's chancellor of the exchequer, George Obsorne said another £25 billion needed to be cut from state spending after the next election, to balance the books.

The fresh cuts are expected to hit wealthy council house tenants and under-25s claiming housing benefit.

According to the chancellor, well-off pensioners were unlikely to lose their free bus passes and television licences under a future Tory government.

He added, families would soon feel better as wages rose and prices fell.

The chancellor said, the cut would eliminate the deficit – the shortfall between what the government took in tax and what it spent, adding it would be a ''very odd choice'' to not touch the ''enormous'' welfare budget, where one could find substantial savings.

Universal pensioner benefits such as free television licences – which also formed part of the welfare bill - were not likely to go as the government had made a ''promise made on values'' to help those who had ''worked hard all their lives''.

Obsorne added, he would look at housing benefit for the under-25s, adding there were plenty of people listening to the programme who could not afford to move out of their home, but there were people, under the age of 25, who could get housing benefits.

Separately, Osborne, setting out his priorities for the next 12 months in a speech said 2014 would be "the year of hard truths".

Also, UK prime minister, David Cameron launched an economic offensive yesterday by making a commitment to sustained increases in state pension until 2020.

In his speech in Birmingham, Osborne warned that an improved economic outlook notwithstanding there was "still a long way to go".

He insisted that tax cuts could only be afforded if further significant reductions were made in the public spending the revenues paid for.

"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," he said.

"That's the good news. The bad news is: there's still a long way to go.

"We're borrowing around £100 billion a year - and paying half that money a year in interest just to service our debts. We've got to make more cuts.

"That's why 2014 is the year of hard truths. The year when Britain faces a choice."