By William James
LONDON (Reuters) - Chancellor George Osborne announced on Monday a wide-ranging set of government spending cuts as part of his ambitious plan to turn Britain's deficit into a surplus by 2020.
The transport, environment, local government and finance departments will have their day-to-day budgets, excluding capital expenditure, cut by an average of 8 percent each year for the next four years, Osborne said.
Osborne, considered the frontrunner to succeed Prime Minister David Cameron, is seeking to shore up his credentials as someone who can deliver his Conservative Party's vision of a smaller state after an embarrassing parliamentary defeat on welfare cuts last month.
Britain's economy has returned to growth under Osborne, but his critics accuse him of crimping its recovery with spending cuts. They also point out he failed to meet his original target to eliminate the deficit by 2015.
In his speech on Monday, Osborne hit back at those critics, adopting an unapologetic stance over spending cuts.
"If our country doesn’t bring the deficit down, the deficit could bring our country down," he said. "That’s why, for the economic security of every family in Britain, the worst thing we could do now as a country is lose our nerve."
Britain's deficit was 4.9 percent of GDP in the 2014/15 financial year -- still one of the highest among advanced economies.
"(Osborne's) record to date is a disappointing one of cutting investment to the lowest of any developed economy, and the slowest economic recovery on record," said the opposition Labour Party's finance spokesman, John McDonnell.
The Treasury did not place a value on the latest cuts, but the four departments involved account for around 22.5 billion pounds of the government's 337 billion day-to-day spending.
They amount to a 30 percent spending reduction by 2020 and come after five years of austerity that has already seen some departmental budgets cut by more than half.
The cuts will be confirmed in a Nov. 25 spending review, which the government has said will set out a total of 20 billion pounds of reductions in departmental spending by 2020. Health, education and defence are largely protected.
In July, Osborne said he was targeting a 10 billion-pound surplus in 2020 by cutting 20 billion pounds from departmental budgets, saving 12 billion pounds on welfare spending and recouping 5 billion by reducing tax avoidance.
Osborne said on Monday that he was still determined to deliver a surplus. But he refused to confirm whether the next set of independent budget forecasts, also due on Nov. 25, would still predict the same 10 billion-pound figure.
"It wouldn't be right for me to try and anticipate those numbers," he said. "A lot can happen over the coming years, and these forecasts move around, so that's why I think you want a reasonably comfortable margin in delivering the surplus."
He said his Nov. 25 budget update would include savings larger than were previously estimated, by addressing "avoidance, evasion and imbalances in our tax system."
(Editing by Larry King)