BRITISH CHANCELLOR of the exchequer George Osborne has said spending cuts in the UK would have to continue even if they took the country back into recession.
Such action was necessary in order to appease financial markets, said Mr Osborne, who spent much of yesterday with Prime Minister David Cameron putting the final touches to over £80 billion (€91 billion) in cuts to be implemented over the next four years.
In the event of a new global downturn, international attention would first focus on European countries and on the UK's national debt and deficit: "You would have to show the world that you had a credible plan to reduce your deficit. That would be, I suspect, where world attention first turned and that's why this is so important," he told the BBC's Andrew Marr Show.
The rate the UK pays for borrowings is one percentage point lower than where it was before the coalition came into power in May. Mr Osborne said he was “not prepared to go back into the place we were five months ago – on the brink of bankruptcy, on the edge of an economic abyss”.
New curbs to prevent welfare fraud are to be announced today, though it is already known that people will have their benefits stopped if they are found to have broken the rules for the third time.
Fines of £50, rather than cautions, will be imposed if information on official forms is shown to be incorrect.
Starting today, the department of work and pensions will name and shame offenders in local media. A man who claimed £10,000 in benefits even though he was working as a nightclub bouncer was named in yesterday's Observer.
However, welfare fraud accounts for just £1.5 billion of the £5.2 billion incorrectly spent by the department, with £1.1 billion being wasted through official error and a further £1.1 billion from mistakes by claimants.
In an interview with the News of the World, Mr Osborne said: "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. You're leaving the house at seven in the morning or whatever to go to work and paying your taxes – and then the person down the street is defrauding the welfare system. This money is paid through our taxes which are meant to be going to the most vulnerable in our society, not into the pockets of criminals."
Meanwhile, he revealed that just four of 15 banks in the UK have signed up to a code of practice introduced last year by the Labour administration guaranteeing that they will meet their tax obligations. He has now given them until next month to do so, or else face the attention of the Inland Revenue.