UK government to slash welfare after next election

Britain's Conservative-led government will trim an extra 10 billion pounds (US$16 billion) a year from its welfare budget and make cuts across the board in the next phase of austerity if re-elected, its finance minister today.

The 2015 election is likely to be decided on the health of the economy, how fast the deficit should be tackled and what areas of spending and taxation each party would focus on to balance Britain's stretched public finances.

The Conservatives, who had bet growth would reduce the deficit and help them win the next election, are struggling with a recession and a series of blunders which have put them about 10 points behind the Labour Party in opinion polls.

Chancellor of the Exchequer (finance minister) George Osborne and Prime Minister David Cameron want to use their party's annual conference in Birmingham to project an image of economic prudence and win back support.

They hope voters will welcome a further 10 billion pounds of cuts in welfare spending - an area often portrayed in the media as rife with scroungers and waste.

"How can we justify giving flats to young people who have never worked?" Osborne told party supporters before a large Union Jack-design backdrop at a party conference whose slogan is "Britain can deliver".

"We made a promise to the British people that we would repair our badly broken economy. We will finish the job we have started," said Osborne, a close Cameron ally who was booed by crowds at a Paralympics medal ceremony last month.

In the 35-minute speech, Osborne said the Conservatives must appeal to those who aspired to improve their lot in life and said it was a delusion to believe the public finances could be brought back on track by raiding the "wallets of the rich".

Britain's "social protection" budget, by far the biggest of all departmental spending, is estimated at 207 billion pounds in 2012/13 - almost a third of total spending.

Labour, which wants to see more taxes on banks and the rich, says Osborne has cut spending too quickly and choked demand. The government says softening its austerity plan would endanger Britain's recovery by putting its low borrowing costs at risk.

Osborne accused the former Labour government of spending too much and said opposition leader Ed Miliband was thus partly responsible for Britain's economic woes: "Labour must never be trusted to run the country's finances ever again," he said.