Osborne to announce £12bn in welfare cuts

UK Chancellor George Osborne on Sunday said he had found £12bn of welfare cuts he needs as part of his plan to balance the current budget by 2017/18.

To meet the target, Osborne said he would put in place £13bn of departmental spending reductions, with a further £5bn to come from new measures to tackle tax evasion.

"We've got to have a welfare system that is fair to those who need it, but also fair to those who pay for it," Osborne told the BBC.

He also reassured that companies will not be forced to raise wages to offset the benefit cuts.

The Labour party warned against “self-defeating” spending cuts.

"On the deficit we need, of course, sensible savings but I want to see proper welfare reforms, proper public services that aren't self-defeating, that aren't going to cost much more for the country in the long-term," Labour spokesman Chris Leslie said.

Osborne announced that the annual welfare cap for individual households would be cut from £26,000 to £23,000 in London, although outside the capital this figure is expected to be set at £20,000.

The statement came three days ahead of his budget announcement.

Seven million children will be hit by the proposed cuts to tax credits, the Goverment's advisers on child poverty warned.

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