Osborne defends deficit cuts despite 'choppy' recovery

The government is on track to virtually eliminate the UK’s budget deficit - currently almost ten per cent of GDP - by the next election, chancellor George Osborne has said.

While the path to full economic recovery may be tough, the coalition remains strong and committed to restoring the UK’s public finances, Osborne told the Institute of Directors.

Osborne added that he saw no need to raise taxes or cut spending beyond the cuts to spending already announced.

“While we must remain realistic about the challenges, I think we can also be optimistic about the future,” Osborne told business leaders at the conference.

“Every business in this country depends on a strong Government and a credible economic policy – and we will deliver just that for the next four years.”

Describing the finances he inherited a year ago as “a moment of real economic danger”, Osborne argued that the coalition’s tough cuts have paid off and pointed to troubled Eurozone nations Greece, Ireland and Portugal.

“We have brought much-needed stability at home and attracted near universal confidence abroad,” he said.

“To anyone still wondering whether we needed to take these difficult decisions, I say – just look at what has happened to other countries over the past year.”

He warned that the recovery “will be choppy," and threatened by global factors.

"High commodity prices, the earthquakes in Japan and uncertainty in the euro zone are all weighing down on growth across the world,” he said.

But he added that the government was determined to push on with its programme of spending cuts and tax hikes.

"We in this government, Conservatives and Liberal Democrats, are as united today in our mission to reduce Britain's deficit as we have ever been. "The coalition is going to last the course.”