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Fierce debate over which benefits will face cuts

Discussions are still going on about what welfare cuts to make next week. Despite the looming deadline, it’s proving difficult.

There are different ideas at Number 10, Number 11 and the DWP, and I’m told there is still no definitive agreement.

This isn’t just about economics - its about ideology too; and its the first purely Tory budget in almost two decades.

It’s the numbers that are driving it, and £12 billion is a BIG number - rather bigger than many think fair or achievable without hurting the vulnerable.

The problem is that Prime Minister David Cameron has ruled so much out, he’s left the Chancellor with little room for manouvre.

With pensioners' benefits ring-fenced, and child benefit changes ruled out too, it seems it will be mainly those of working age who will be hit.

It has been hinted that tax credits will be cut back, but expect any announcement on that to be wrapped up in an ideological package with some earning incentives to sweeten the cuts.

The Prime Minister hasn’t ruled out taxing Disability Living Allowance either. After all, other European countries do it.

Cameron is said to be very nervous about this, although others point out that if the Tories are going to be tough, the best time to do it is early in their tenure.

Some have even whispered about changes to Carer’s Allowance.

That would take quite some guts given the rhetoric the government has used to thank them all for the billions they save the state.

I think it’s likely we will see an extension of the promised Housing Benefit cut to those aged 18 to 21 on Job Seekers Allowance to the under 25s too.

“Its all about making those on benefits have parity with those who aren’t” one Tory advisor told me, pointing out that adult children who work have to live at home - so why should those on benefits get better treatment?

Protests over previous cuts Credit: PA

There may well be cuts to the Employment Support Allowance to bring it in line with those claiming Job Seekers Allowance, and we can certainly expect multiple cuts to small benefits like statutory maternity pay and such like, as the state contracts and urges business to step up and take its place.

To cut £12bn in one blow would really hurt.

My guess is they won’t dare - or agree in time - to do it all in this budget, and will split the cuts between now and the Autumn Statement.

I would also guess they will opt to take a little from a lot of people. Even so - stand by for what lies ahead.

Those on low incomes can expect change and painful adjustment as the State withdraws some support, and the wait begins for behaviour to change or for anyone else to step in to fill the gap.