Britain's finance minister says the government will cut the welfare bill by another £10 billion over the next year in order to reduce a massive deficit.
The reductions are in addition to the £18 billion in welfare cuts already planned by 2015 by Conservative Prime Minister David Cameron's coalition.
Chancellor of the Exchequer George Osborne told the Conservative Party's annual conference it is unfair people in work should earn less than those without jobs, AFP reports.
He ruled out a so-called mansion tax on big houses, a move favoured by the Liberal Democrats, the junior partners in the coalition government, though he insisted the wealthy will continue to bear the greatest burden.
Mr Osborne indicated that young unemployed people were likely to see reduced housing benefit, while there would be other cuts across the board in Britain's welfare system.
"How can we justify that people in work have to weigh up the costs of having another child when those out of work don't?" he added.
The Liberal Democrats are opposed to further welfare cuts unless new wealth taxes are also introduced.
The coalition promised to cut Britain's record deficit when it was elected in 2010 but it has struggled with a double-dip recession in the world's seventh largest economy.