Chancellor George Osborne on Sunday said he had found all 12 billion pounds ($18.67 billion) of welfare cuts he needs as part of his plan to balance the current budget by 2017-2018, speaking ahead of his budget announcement on Wednesday.

The budget is Prime Minister David Cameron's Conservatives' clearest chance in almost two decades to remold Britain into a low-tax, small-state economy after an unexpectedly decisive election victory handed Osborne a mandate to make deep cuts.

To meet his target, Osborne says he needs to cut the annual welfare bill by 12 billion pounds, make 13 billion pounds of departmental spending reductions, and to raise an extra 5 billion pounds by clamping down on tax evasion and avoidance.

"We have found that 12 billion pounds of savings in welfare that we said we'd be able to find," Osborne said on BBC television, without specifying full details. "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."

But the opposition 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 told the BBC.

Osborne said that people living outside London would be subject to a lower cap than previously thought on the total amount of benefits they can receive. The cap will be reduced to 23,000 pounds for those living in London, in line with pre-election promises, but he did not set out the lower ceiling that would apply elsewhere.

He also said those on high incomes in subsidized local authority housing would have to start paying closer to the market rental rates.

The Sunday Times reported that Osborne plans to launch a 650 million-pound raid on the BBC to help cover the country's benefits bill, forcing the corporation to meet the cost of free television licenses for the over-75.