George Osborne has dismissed suggestions of a rift between himself and Work and Pensions Secretary Iain Duncan Smith over spending cuts.
Reports over the weekend suggested Duncan Smith was considering his position over Mr Osborne's demands to take money from the welfare budget to pay for his climbdown on tax credits.
Asked if he and the Work and Pensions Secretary were at odds, Mr Osborne told reporters: "Compared to the other two spending reviews I have done, this one is going more smoothly and we are making further and faster progress.
"Things are going very much as we would hope them to go."
Iain Duncan Smith's latest bid to tighten the welfare system - in which he said work is "good for your health" - has faced sharp criticism.Read the full story ›
A leaflet from the Department of Work and Pensions has been revealed as fake after officials made up comments from fictional claimants.Read the full story ›
A union leader said the case had exposed Iain Duncan Smith as "brutal and unforgiving".
Mark Serwotka, general secretary of the Public and Commercial Services Union, said: "We pay tribute to the claimants but they should never have had to resort to the courts.
"Cases like this expose Iain Duncan Smith's brutal, unforgiving and suspicious attitude to people who rely on social security and the failure of privatisation to offer the kind of help and support DWP staff want to provide."
The Prime Minister will address the Conservative Party’s 1922 committee, tomorrow, in another sign of his tough stance on Europe.
Downing Street has also confirmed that Iain Duncan Smith will continue his work making work pay and reforming welfare as Secretary of State for Work and Pensions.
Tina Stowell will be made a full member of the Cabinet, as Leader of the Lords and Lord Privy Seal.
The full reshuffle is expected to happen tomorrow.
Work and Pensions Secretary Iain Duncan Smith suggested today's unemployment figures show the Government's long-term economic plan "is working".
In the week that Universal Credit started its nationwide roll-out, these figures show that a reformed welfare system goes hand in hand with helping people to take advantage of the record number of vacancies available.
The jobs-led recovery is changing people's lives for the better on a daily basis. We are getting people into work, making work pay, and in so doing we are ensuring a better future for Britain.
Iain Duncan Smith has defended the Universal Credit scheme, claiming it is under budget and helping people find work quicker and earn more.
The flagship scheme - which merges existing income-based benefits such as Jobseekers Allowance (JSA) and tax credits into a single payment - is due to be rolled out across the country tomorrow.
The Work and Pensions Secretary denied claims the flagship scheme was over budget, insisting his department was spending £600 million less on the programme than expected.
Speaking on the BBC's Andrew Marr Show, he said Government research showed that those receiving the benefit were 5% more likely to find employment within four months than comparable JSA claimants.
Labour said the scheme was massively behind schedule and saving far less than expected, describing the roll-out as a "spiralling waste and delays".
Work Secretary Iain Duncan Smith has said he plans to trial pre-paid cards for some benefits claimants:
Work Secretary Iain Duncan Smith has said that the government will accelerate the delivery of Universal Credit from next year, rolling it out across the country in 2015-16.
"I promise you we are going to finish what we started," he told delegates at the Conservative party conference.
Work and Pensions Secretary Iain Duncan Smith has said he supports the Government's position against military involvement in Iraq.
He told Deputy Political Editor Chris Ship that we face "very different circumstances" than during the Iraq War, of which he was a strong supporter.