The Chancellor pointed to evidence that Britain’s hard work is paying off and that, “For the first time in a long time, there’s a real sense that Britain is on the rise.”
But as the New Year begins he also wanted to warn against any complacency that the hard part of the job is done.
The Chancellor said: “That’s why 2014 is the year of hard truths. The year when Britain faces a choice.
“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. More repairs. More cuts. More difficult decisions.
“That’s the choice in 2014: to go on working through a plan that is delivering for Britain, putting us back in control of our destiny with the security and peace of mind that brings; or squander what we’ve achieved and go back to economic ruin.
“Ultimately it’s your choice – a choice for the British people.”
He then set out the five components of his long-term economic plan to build a stronger, more competitive economy to secure a better future for hard-working families and future generations by:
·cutting the deficit
·reducing taxes for hardworking people
·creating more jobs by backing business
·capping immigration and welfare
·delivering the best schools and skills
The chancellor said the current forecasts implied further cuts of around £25 billion over two years by 2017-18. He said, based on these current forecasts and assumptions, in order to maintain the pace of departmental spending reductions as in the current spending period, there would need to be a further £12 billion of welfare savings by 2017-18.
More difficult decisions are needed, the Chancellor concluded, adding “let’s finish the job.”
Commenting on the speech by the Chancellor, TUC general secretary Frances O’Grady said: “Voters may have endured the cuts as nasty medicine during recent years of recession and stagnation but they expect to benefit now that the economy is recovering.
“Polling shows that people do not share the Chancellor’s vision of permanently shrinking the state, with most wanting the services that have been cut to be restored as growth returns. Fewer than three in ten people want cuts retained.
“Public spending cuts of the magnitude proposed by George Osborne would cause real pain to hard-working people. Such cuts could not be achieved without getting rid of the vital safety net that people need if they have a baby, lose their job, or have an accident at work.
“Three-quarters of the welfare cuts already announced have fallen on working people, and further cuts will simply prolong the living standards crisis.”