George Osborne today raised the spectre of further cuts to Britain's soaring benefits bill as he began the grim task of imposing £40bn of savings outlined in his 'bloodbath' Budget.
The Chancellor said the new cuts to benefits - on top of the £11bn he unveiled yesterday - could be used to spare Whitehall departments a savage 25 per cent reductions in their expenditure.
In a round of interviews, he strongly defended the package of tax increases and spending cuts - including a controversial hike in VAT to 20 per cent.
He said this was was essential to tackle the massive deficit.
Mr Osborne had yesterday warned MPs that individual Government departments now faced cuts averaging 25 per cent over the next four years unless - like health and overseas aid - their budgets were ring-fenced.
With the Chancellor signalling that defence and education would also receive favourable treatment in the spending review in October, that would mean even deeper cuts to the rest of Whitehall.
