Welfare bill faces further £25bn cut

By politics.co.uk staff

Further drastic cuts to the welfare budget are being considered in No 10, according to reports.

David Cameron's policy guru Steve Hilton is reported as having submitted a paper proposing a £25 billion reduction in spending on benefits before leaving for an academic sabbatical in the US.

Those of working age would pay the price for the move, which would see housing benefit cut further and women encouraged to return to the workplace more aggressively.

"These things are part of a much bigger extended programme from where we are, to take us forward," a Downing Street source told the Telegraph newspaper.

"There are longer term saving by getting more people into work, by giving people greater control of their lives, by making them essentially the masters of their destiny again, we will reap massive rewards and thus massive savings."

It is not clear whether work and pensions secretary Iain Duncan Smith will support the full extent of the cuts. His universal credit could be extended with a 'mark two' wave of reforms.

The change could also be resisted by Liberal Democrats in the coalition.

George Osborne warned in this year's Budget that, even with spending cuts continuing at the same rate throughout the next parliament, welfare savings of £10 billion would have to be made.

"If nothing is done to curb welfare bills further, then the full weight of the spending restraint will fall on departmental budgets," the chancellor warned.

"The next spending review will have to confront this."