Anger as George Osborne plans to slash another £4bn from benefits

CHANCELLOR George Osborne has warned that "the lifestyle choice of living on benefits" is over, as he seeks to slash £4 billion from the welfare bill.

People on jobseekers allowance and incapacity benefit will be the focus of the Chancellor's new purge on the welfare budget, which he claims is "out of control".

The government has already announced it will take 11bn out of welfare in the next four years, mostly from housing benefit.

The early announcement on the strategic spending review, which is not going to report until October, has outraged anti-poverty charities, but was described as necessary by Mr Osborne.

"The welfare bill has got completely out of control. There are five million people living on permanent out of work benefits. That is a tragedy for them and fiscally unsustainable for us as a country - we can't afford it any more," he said.

The Chancellor would not be drawn on exactly where the axe would fall, amid concerns universal benefits such as child benefit could be targeted, but he promised to honour commitments pensioners on protecting their benefits, including the winter fuel allowance and free bus passes.

John Dickie, head of the Child Poverty Action Group in Scotland, and a leading member of the Scottish Campaign on Welfare Reform, said: "You can't rip 15bn out of the welfare budget without hurting the poorest and most vulnerable.

"It is nothing short of outrageous that just weeks after the coalition's first budget was shown to hit the poorest hardest, even further cuts are planned."

However, Deputy Prime Minister Nick Clegg tried to calm fears on spending cuts yesterday, stressing that departmental reductions of up to 25 per cent would be staggered over four years.