Osborne resists pressure to weaken austerity measures ahead of budget

Britain’s chancellor of the exchequer has resisted pressure to change course over his austerity plans as he warned there were “no easy answers” to the UK’s economic woes.

George Osborne insisted that failing to tackle the country’s debt and deficit problems could leave the UK on the brink of a crisis like that in Cyprus.

He said tomorrow’s budget would contain measures to “help those who aspire to work hard and get on” but would also set out the scale of further curbs on public spending from 2015.

Yesterday tax-free childcare plans were announced, with eligible families receiving up to £1,200 a year for each child, to a maximum of 20% of their annual costs.

Mr Osborne also announced plans to accelerate the introduction of a cap on the amount people will have to pay for social care at £72,000 (€83,800) in 2016.

The £144-a-week single state pension will also be introduced a year ahead of schedule in 2016, he said.

The chancellor has also backed plans put forward in former government minister Michael Heseltine’s growth report to give communities and businesses a greater say on how money is spent.

But on his central aim of restoring the nation’s finances, Mr Osborne said there was “no miracle cure” and “painstaking work” was required.

He told BBC1’s Andrew Marr Show the crisis in the Cypriot banking system illustrated the dangers.

“That is an example in Cyprus of what happens if you don’t show the world that you can pay your way. I mean, that is why in Britain, we’ve got to retain the confidence of world markets,” he said.

In a bleak assessment of the challenge facing the country, Mr Osborne said: “There is no easy answer to Britain’s problems, there is no miracle cure because if there was a miracle cure it would have been deployed.

“It’s just a lot of hard work of dealing with Britain’s debts, helping businesses create jobs, helping families who want to work hard and get on.”

“The only way through for this country is to confront those problems head on and energise the people who are actually going to get this economy moving, the people with aspiration.”

Mr Osborne is under pressure to help people with the cost of living, through cancelling a fuel duty rise due in the autumn and scrapping the beer duty escalator that automatically ups the price of a pint.