2014 year of 'hard truths' for British economy: Osborne

British finance minister George Osborne will warn that 2014 will be the year of "hard truths" and public spending cuts when he sets out his plans for the year ahead on Monday.

He will tell an audience in central England that there is "still a long way to go" in reducing the public deficit, despite three years of austerity, according to extracts released by his office.

"We're borrowing around £100 billion ($163 billion, 120 billion euros) a year -- and paying half that money a year in interest just to service our debts," he is to say.

"We've got to make more cuts. That's why 2014 is the year of hard truths...the year when Britain faces a choice.

"There is still a long way to go -- and there are big, underlying problems we have to fix in our economy."

British government borrowing in 2012/13 was equivalent to 5.2 percent of GDP, down from 7.6 percent in 2011/12, according to official statistics.

He will identify the five components of his long-term economic plan as: reducing the deficit, improving education, capping welfare and reducing immigration, cutting income taxes and freezing fuel duty and providing more support for small business.