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Welfare cuts 'will restore economy'

Deeper welfare cuts are "a price that works" to restore the UK economy and create more jobs, George Osborne insisted in the latest salvo of a public spat between the coalition government parties over spending plans.

The Chancellor hit back after his Liberal Democrat deputy at the Treasury Danny Alexander claimed the Tories would "inflict unnecessary pain" on the country because they were "ideologically committed" to shrinking the state and had a policy of "austerity forever".

Senior figures - including Prime Minister David Cameron and Deputy Prime Minister Nick Clegg - have been engaged in tit-for-tat sniping since last week's Autumn Statement as both parties seek to offer voters distinct pitches in the run-up to May's general election.

Mr Osborne has dismissed as hyperbole warnings about the impact of what experts say would be Government spending cuts "on a colossal scale" after May if the Conservatives are in power.

Defending his blueprint, he told the BBC: "We are going to have to make savings... we are going to have to cut certain welfare bills like benefits that go to working-age people.

"But the prize is economic stability, growth, jobs in the future, brighter future, I think that's a price that works for our country."

It was the Lib Dems that were " offering ... a chaotic alternative of higher taxes, higher borrowing and a return to economic chaos" that would take Britain "back to square one", he suggested.

Mr Alexander, Chief Secretary to the Treasury, used an article for The Daily Telegraph to accuse his coalition partners of a " move away from the sensible, balanced approach of the coalition, to a more doctrinaire policy that would inflict unnecessary pain on the people of Britain".

Tories were "pandering to Ukip" in a pre-election "panic", he suggested, after Mr Clegg accused the Tories of "kidding" voters over the scale of cuts they would impose and demanded they "come clean" to the public.

Mr Cameron retorted that the Lib Dems were "all over the place" and would "prop up a failing Labour government" after the general election next year putting the "hopes, dreams, and livelihoods" of millions of Britons at stake, he claimed.

The Chancellor also said that the number of public sector jobs in the firing line could be kept down so long as pay was restrained.

"If we go on taking what I think are realistic decisions on public sector pay then we can still afford to have people in sufficient numbers in the public sector to do the job we ask of them," he said.

Mr Alexander said the sniping was "totally unsurprising" with the election less than five months away but would not mean the power-sharing arrangement was in peril in the meantime.

"What we are doing is something that should be totally unsurprising, which is two political parties - with very different ideologies - setting out their views about the future of this country in a clear and distinct way and I am going to continue doing that for the next five months and beyond.

"But that does not in any way undermine our ability to work effectively together in this coalition to keep the country on the right path."

Mr Osborne said it was the Lib Dems who were failing to be honest with voters.

"I think there is a choice between chaos and competence," he said.

"We are offering a competent government with a clear plan that involves difficult decisions on spending and on welfare, and making the rich to pay more through their tax avoidance schemes being closed down. And that is delivering economic security.

"The alternative is economic chaos and people who are simply not being straight with the public about what their plan involves."

He added: "That is not a future I want for this country and I'm going to fight hard to avoid it."

There was a "perfectly legitimate difference" between the coalition parties, he said, as the Lib Dems were offering the same "chaos" as Labour and Ukip.

"The lot of them are offering a return to Britain of economic crisis, high unemployment, higher debt, higher taxes. We don't want that in this country."

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