Incapacity benefits could be cut under chancellor's reform plans

Millions of people deemed unable to work face cuts to their benefits after the chancellor said the incapacity benefit would face reform.

George Osborne has signalled that 2.6 million claimants of the benefit would be targeted as part of the "trade-off" between cuts in welfare spending or cuts in front-line services.

He said: "It's a choice we all face. It's not a choice that can be ducked. Of course we have to look across the piece at the welfare bill and of course we have got to look at individual benefits."

The UK's annual incapacity benefit bill currently stands at £12.5bn.

Osborne warned incapacity benefit would have to be included in the assault on the UK's £192bn welfare bill unless spending on schools, the police and other public services was to suffer, the Times has reported.

He added there would be further tough decisions ahead as the Treasury spends the summer fleshing out spending cuts of up to 30% in some departments.