Welfare cuts could be more than £4 billion

• Danny Alexander describes George Osborne as a 'close friend' Pic: Getty

In an exclusive interview with The Scotsman ahead of Liberal Democrat conference in Liverpool, which starts today, Chief Secretary to the Treasury Danny Alexander said the welfare cuts could go deeper.

The issue has already been a cause of splits within government. Work and Pensions Secretary Iain Duncan Smith claimed this week that he "does not recognise" Mr Osborne's 4 billion figure.

These cuts are on top of 11 billion savings announced in the next four years by the coalition Government in the emergency Budget.

It is known Mr Duncan Smith is opposed to extra cuts being imposed on his department before it can assess which programmes to get people back to work are successful.

But in his interview, Mr Alexander has entered the debate on the side of Mr Osborne, a man he now describes as a "close friend" since the two came together in the coalition talks in May.

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When asked by The Scotsman whether he "recognised" the 4 billion figure of contention between Mr Osborne and Mr Duncan Smith, he said: "I think I wouldn't want to say it was going to be limited to that amount."

When asked if it could be more, Mr Alexander said: "We haven't decided on a number yet."

He added: "There are a lot of areas we can look at in the welfare system particularly in our wider plans to have a radical work programme, to have a lot of people off benefit into work.

"It is right that we look very searchingly at welfare."

Mr Alexander said that the lack of reform to welfare was one of the "greatest failures" of the last Labour Government and he claimed that "radically reforming it" was "the right and Liberal thing to do."

He added: "When Labour came to office there were 2.6 million people on incapacity benefit and when they left office there were 2.6 million people on incapacity benefit. It is one of the most appalling parts of their record."Mr Alexander insists the emergency Budget and the work he is carrying out with Mr Osborne is "progressive" and hits the poorer less hard.

But he said that although a few people "choose to live on benefits" most people out of work "are desperate to get back into work" and want help and support to do so.

Like his Tory colleague the Chancellor, Mr Alexander insisted that reform of welfare had to play its part in reducing Britain's budget deficit, to deal with what he describes as the worst economic crisis in decades.

"When we came into office we could see what was happening to other countries, particularly in Europe where people were questioning their ability to deal with their financial problems and the consequences that has in terms of higher interest rates, employment, unemployment and the impact on growth and so on," he said.

"We had a pretty stark choice which was do we want people asking those questions of the UK or are we willing to take the firm stance in terms of deficit reduction that would absolutely restore confidence in Britain's ability to pay its way in the world.

"I think we have made exactly the right judgement". Ahead of a conference where some party members, including former leader and fellow Scottish MP Charles Kennedy, are nervous about the Liberal Democrat role in cuts and increasing VAT, Mr Alexander had a strong message.

"One of my messages to the party is that this (the cuts) is our process, we are committed to that and people have to understand that as well as everything else that the government is doing," he appealed.

He said that it was "absolutely necessary" to put the British economy on a strong footing again and to encourage the growth needed to pay for good public services.

Mr Alexander's comments drew fire from the opposition parties last night, with Labour arguing that they confirmed the Lib Dems had "gone native" with the Conservatives.

East Lothian Labour MP Fiona O'Donnell, a member of the Scottish affairs committee, said: "This shows the Lib Dems have gone native with the Tories. They both want to hurt the poor and are trying to outdo each other."

She added: "One minute the Chancellor tells the BBC there will be 4 billion extra cuts in welfare, then the Secretary of State said he didn't recognise those figures, and now the Chancellor's assistant tells us actually it might be even more than that.

"This shows the chaos at the heart of Government. Conducting these rows in public means they are scaring vulnerable people who have no idea how much more they will lose."

SNP work and pensions spokeswoman Dr Eilidh Whiteford MP said: "Danny Alexander's assumption appears to be that everybody on benefits is somehow cheating the system or workshy."