I want £12billion more cut from welfare, says George Osborne Chancellor warns that long-term recovery remains in the balance He backs further cuts to welfare instead of tax rises or more borrowing Proposes axing housing benefit for under-25s and banning council houses for high earners George Osborne insisted yesterday that £12billion in further welfare cuts should be targeted at working-age claimants - despite unease from senior Tories about continuing to spare pensioners. The Chancellor said the social security budget was still enormous despite three years of savings and 'cannot be protected' after the next election. His plans for a further two years of cuts drew a sharp response from Deputy Prime Minister Nick Clegg, who claimed targeting only the working-age poor was a monumental mistake and 'extreme, unrealistic, unbalanced and unfair'. The Chancellor used a speech to employees at the Sertec Factory in Coleshill, Birmingham to say a further £25billion spending cuts will be needed after the next election, including £12billion from the welfare budget Mr Clegg said it was clear the Tories wanted to 'remorselessly tear back the state' for ideological reasons. The Liberal Democrats have repeatedly said they will not countenance more reductions to working-age welfare unless pensioners are also made to share the pain. And even some senior Tories are understood to be dismayed at the reluctance to consider cuts to pensioner perks. These include the winter fuel allowance and a hugely expensive commitment to maintain a 'triple lock' guarantee that the state pension will rise every year in line with wages, prices or by 2.5 per cent, whichever is highest. 'The truth is there are no easy options here and if we are to fix our country's problems then cutting the welfare bill further is the kind of decision we need to make' Chancellor George Osborne Work and Pensions Secretary Iain Duncan Smith is among those said by Cabinet sources to have been urging that a commitment to leave universal pensioner benefits untouched until 2015 should be reviewed after the next election. Others suggest the winter fuel allowance should be taxed for better-off OAPs and the age at which they qualify for free bus passes and TV licences increased. But the Chancellor said yesterday: 'If you were going to be looking for savings in welfare, pensioner benefits is not the place that I would first turn to. It saves a few tens of millions of pounds, it is not where you need to make the substantial savings required to make sure this country continues with the plan it has. Another Government source suggested that having committed to spend billions maintaining the pensions triple lock at least until 2020, it would not be worth upsetting the 'grey vote' by targeting their benefits to recoup relatively small sums. The Chancellor insisted that welfare should be cut by £12billion in the two years after 2015 as part of a package of cuts worth £25billion. Mr Osborne said it was not fair that people in work were being taxed to pay for rising benefits George Osborne revealed an extra £25billion of cuts are needed after the election, and wants almost half to be raised from welfare. But cutting housing benefit and council house rights still leaves a lot of money to be found: £25billion Savings needed over two years by 2017-18 £12billion Extra welfare cuts Osborne says are needed £1.8billion What could be saved from scrapping housing benefit for under-25s 1.69million Number of families on council house waiting lists who could benefit if high earners were evicted £2billion Annual cost of winter fuel allowance for pensioners which the Tories are hinting will remain protected after 2015 He described 2014 as a year of 'hard truths', insisting that despite the economic recovery significant further cuts would be needed in the years ahead. 'It's far too soon to say job done,' Mr Osborne said. 'It's not even half done.' The Chancellor, speaking in Birmingham, insisted that without more reductions in welfare the Government would have to increase taxes or make further reductions to public services. He said: 'The truth is there are no easy options here and if we are to fix our country's problems, and not leave our debts to our children to pay off, then cutting the welfare bill further is the kind of decision we need to make.' Mr Osborne conceded that he did not know when folk would start to feel the effects of recovery. 'There's a hard truth, which is this country is much poorer because of the economic collapse six or seven years ago, and families feel that,' he declared. Shadow Chancellor Ed Balls said Labour does not accept the need for £25billion in further cuts, claiming Labour's plans to promote growth could lead to the deficit coming down more quickly. 'What Labour says is a real plan to get the deficit down in a fair way means getting young people back to work, means getting our economy to grow more strongly by investing for the future and making sure that the decision you take on deficit reduction are fair,' Mr Balls said. Paul Johnson, of the Institute for Fiscal Studies, said cuts to housing benefit for the under-25s and council housing for the better off would raise at most £2billion. He said cutting £12billion from the welfare budget would mean 'taking money from people who are poor or who are sick and disabled or from people with children, none of which look terribly easy to achieve'. The Tories challenged Labour and the Lib Dems to back cuts to welfare, or explain which taxes will have to rise or public spending cut elsewhere