UK's Osborne expected to slow rate of cuts in landmark budget

Chancellor of the Exchequer George Osborne will announce austerity cuts in Britain's budget on Wednesday, although the first all-Conservative budget for 20 years is expected to be less harsh than previously feared.

Osborne will present the budget to parliament at 12:30 pm (1130 GMT) -- the first since his party won a shock outright majority in the May 7 general election.

Osborne had warned to expect another £12 billion ($19 billion, 17 billion euros) of savings over the next two years.

But reports on Tuesday suggested he was to extend the cuts timetable by one year, with £8 billion of savings by the 2017/2018 tax year and a further £4 billion the following year.

The centre-right Tories swept into power on the back of promises to stick to the austerity plan that they implemented with the Liberal Democrats during the last coalition government.

Osborne was expected to say "the greatest mistake" was to "think all our problems are solved".

"You only have to look at the crisis unfolding in Greece as I speak to realise that if a country's not in control of its borrowing, the borrowing takes control of the country," he will say.

He will seek to cap annual welfare payments at £23,000 per household in London, against the current level of £26,000. The amount will be lower still outside the capital.

- Savings for the BBC -

Osborne has also said that Britons on higher incomes in subsidised council housing will have to pay closer to the market level of rent.

The Conservatives want to lower the tax burden, but also address concerns that the welfare system encourages a culture of state handouts.

Wednesday's spending plan will seek to build upon Osborne's first budget of the year, which was presented under the previous coalition in March.

It will also be Britain's first budget written solely by the Conservatives since 1996, when former premier John Major was in power

During the coalition years, Osborne was forced to soften some of his austerity measures in the face of fierce pressure from the Lib Dems.

However, Osborne's priority remains tackling Britain's total debt, which stands at about £1.5 trillion, with a deficit of around 4.0 percent of GDP in the current 2015/2016 financial year.

Other measures expected to be announced include increases in the thresholds for inheritance tax and the top rate of income tax.

Osborne also plans to save another £650 million per year by forcing the state-funded BBC to foot the bill for the provision of free television licences for Britons aged over 75.

"The BBC is also a publicly funded institution and so it does need to make savings and contribute to what we need to do as a country to get our house in order," he said on Sunday.

In addition, Osborne will announce new laws to force governments to run a surplus.

The previous Conservative-Liberal Democrat  oversaw billions of pounds of cuts to state spending to slash a record deficit.

The coalition had already promised the public purse would turn a surplus by 2018/2019.

The British economy is forecast to grow by 2.5 percent this year and 2.3 percent in 2016, leading to higher tax revenues