Osborne’s cuts: where will the axe fall?

There may not be a general election until May 2015, but the recent "salvos" from David Cameron and George Osborne are typical of the start of an election year, says Steve Richards in The Independent.

The essence of their pitch is that a lot has been done towards tackling the deficit, but there is still a long way to go. So we'll be getting good and bad news in 2014. The "good news" is that Cameron confirmed the triple lock' on pensions; the bad news is that Osborne is insisting that £25bn of cuts are required after 2015, £12bn of which will come from welfare.

The arguments are "close to being contradictory", since, by announcing his positive news, Cameron "sealed off this particular pot of cash" to Osborne.

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The triple lock, which means that pensions will rise by at least 2.5% until 2020, is "absurdly generous" says Ross Clark in The Times. According to an analysis by the Department for Work and Pensions (DWP) in 2012, the cost of the basic state pension in current prices will rise from £60bn in 2011-2012 to £76bn in 2021-2022.

Cameron has also said he is "minded" to protect perks for the elderly, such as winter fuel allowance and free bus passes, after the next election.The free TV licence costs £616m, winter fuel payments cost £2.2bn and the free bus pass £1.2bn, says Sam Coates in The Times.

Cameron denied this was a "cynical ploy" to woo the grey vote. But "more than seven out of ten over-65s voted in the last two general elections, compared with barely four out of ten 18- to 24-year-olds. The most recent YouGov poll suggests that 40% of over-60s would vote Tory."

Politically, Osborne is on reasonably firm ground, says the FT. The Tories lead the polls in terms of economic management and steeper cuts to the welfare budget will strike a chord with an electorate "increasingly impatient with the cost of Britain's safety net".

However, protecting the elderly leaves Osborne with only about half of the £200bn welfare budget from which to extract £12bn and this "will not be easy". It would be fairer and more sensible to spread the pain. The pledge to ringfence health and international development "looks increasingly anomalous" too.

Osborne's proposals aren't popular with Nick Clegg and he may have reignited a feud with Iain Duncan Smith, the work and pensions secretary, who is reportedly angry that he is "hacking at the same people", say Francis Elliott and Philip Aldrick in The Times.

The cuts won't even do the job, add Rowena Mason and Nicholas Watt in The Guardian. A Whitehall source said two of Osborne's proposed targets housing benefit for under-25s and people on incomes of £60,000-£70,000 in social housing will produce "laughable" savings, possibly as little as £100m.

Osborne is challenging his opponents to find the cash elsewhere, says Elliott. Public finances have to be brought under control. Borrowing will reach £96bn in the coming year. Britain will not start paying down its debts until 2018, say official forecasts, by which time the national debt will stand at £1.57trn.