Labour attack Osborne plan for further welfare cuts

Labour have attacked government plans to cut the annual welfare bill by a further £4bn, one MP said the poorest were being made "scapegoats"

Chancellor George Osborne wants more welfare savings on top of £11bn already identified, targeting those he says make a "lifestyle choice" not to work.

Shadow Treasury Minister Liam Byrne accused him of "taking an axe" to unemployment benefits.

Lib Dem MPs have also queried the coalition government's plans.

Mr Osborne told the BBC on Thursday that welfare spending was "completely out of control" and he wanted to stop people just "sitting on out-of-work benefits" and not attempting to find work.

The Treasury says the targets for the reductions - expected to be outlined in the coalition government's spending review in October - are still being discussed.

Further cuts of £4bn, in addition to the £11bn announced in June's budget, would represent a drop of about 6% of total spending on welfare.

Labour say the plans lacked details of how the savings will be achieved and over what period, and should have been announced to Parliament firrst.

"The reality is that right now what we need is a plan to get people back into work," Shadow Chief Secretary to the Treasury Liam Byrne told BBC Breakfast.

It is very easy in a recession to look for scapegoats and one of the scapegoats that is already brought out is the poor”

"All we have got from the government so far is a plan to cut public spending so quickly, so deeply that hundreds of thousands of people will be put on the dole."

Aware that spending cuts would push up jobless levels, he said Mr Osborne was trying to keep the unemployment bill "as low as possible by taking an axe to dole payments".

Labour MP John McDonnell dismissed Mr Osborne's comments "as a publicity stunt" and said they did not "reflect the reality" of most people who wanted to work but faced a lack of jobs and support.

The chancellor's approach flew in the face of efforts by his Cabinet colleague, Work and Pensions Secretary Ian Duncan-Smith, to make work pay better by removing benefits more gradually, he told BBC Radio 4's Today programme.

There have been reports of disagreements between the two men over how to pay for welfare reform proposals, claims denied by the government.

Mr McDonnell said: "It is very easy in a recession to look for scapegoats and one of the scapegoats that is already brought out is the poor."

The proposals have also caused concerns some among some Lib Dem MPs, already unhappy about the pace of spending cuts and plans to raise VAT in January.

"I wish the government had equal enthusiasm towards people who are fiddling on VAT, income tax and all all those tax avoidance schemes as well," Bob Russell, MP for Colchester, told the BBC.

"Blaming welfare cheats, and I don't support welfare cheats, is similar to the French government blaming everything on the Roma, who they are deporting. So finding a scapegoat I don't think is very ethical."

However, Tory MP Michael Fallon - a member of the Treasury Select Committee - said when all departments were having to make substantial savings, the welfare bill should not be "sacrosanct".

A special BBC News season examining the approaching cuts to public sector spending

"It would be quite wrong to start cutting every other departmental budget but leave the entire welfare bill intact," he told Today.

There were half a million vacancies in the economy, he added.

"We have this generational unemployment of families where there has been nobody working for a long period of time and we have to change that."

The BBC understands discussions are continuing in Whitehall about whether it is possible to limit pensioner benefits - such as the winter fuel allowance, bus pass and free TV licence - without breaking Prime Minister David Cameron's election promise that he would preserve them.

The Conservatives have described as "lies" Labour's warnings that those benefits would be scrapped.

October's spending review is likely to be the toughest in a generation, with most government departments have been told to prepare packages of cuts worth between 25% and 40%