LONDON: Britain will clamp down on welfare fraud, slash government spending and press banks to pay more tax in an attempt to cut its record peacetime budget deficit, Finance Minister George Osborne said on Sunday. Speaking before a spending review on Wednesday that will deliver the biggest public cuts in decades, Osborne dismissed opposition criticism that the plan was “economic masochism”. “We have to see this through,” he told the BBC. “We were on the brink of bankruptcy. If we are going to have growth and jobs in the future, we have got to move this country into a place where people can invest with confidence.” The long-awaited spending review will give details of cuts worth £83 billion ($133 billion) over the next four years in an austerity plan designed to secure economic recovery. Osborne aims to reduce a deficit of 11 percent of national output to just over 2 percent in five years. The opposition Labour Party, which lost an election in May after 13 years in power, says the deep cuts risk tipping Britain back into another recession. Conservative Prime Minister David Cameron, who leads a coalition government with the smaller Liberal Democrats, says Britain must cut the deficit quickly to reassure markets. Unions have threatened coordinated strikes to protest against expected job losses. France, Spain and Greece have already seen mass rallies and industrial action against cost-cutting measures such as pension reforms. Osborne played down suggestions that the scale of the cuts risked opening a rift between his center-right Conservatives and the centrist Liberals, who opposed big cuts while in opposition. A ComRes poll for the Independent on Sunday newspaper said just 57 percent of those who voted Liberal Democrat in May would vote for them in an election today. That compares to 94 percent of Conservative voters and 92 percent of Labour voters. Overall support for the Liberal Democrats fell one point from last month to 14 percent. Before the election, their support peaked above 30 percent. Welfare claimants will face greater scrutiny in an attempt to weed out fraud, and child benefit payments will be axed from 2013 for families where either parent earns over £44,000 a year. Osborne said people caught trying to defraud the benefits system three times would lose their right to state money. Those making mistakes on official forms would be fined 50 pounds. All banks will have to sign up to a code of conduct on tax avoidance by November, he added. So far, only four out of 15 major UK banks have agreed to do so. Osborne pledged support for big infrastructure projects, including an underground rail link across London and a new road bridge across the River Mersey in northwest England. Labour's finance spokesman Alan Johnson described the cuts as “economic masochism” and said they would damage growth. “We wouldn't cut as deeply and we wouldn't cut as quickly,” he said.
