Fresh warning over drastic spendig cuts

The Prime Minister warns that it will mean the axe for "some things that we genuinely value" but that the Government has a "duty" to cut back.

Writing in a Sunday newspaper, he compared Britain to a failing company and his Tory-Lib Dem coalition administration to new owners trying to make it profitable again.

Ministers are set for mounting tussles with the Treasury as they finalise cuts of up to 40 per cent ahead of October's announcement of the results of the spending review.

Mr Cameron spent some of the first week of the long Parliamentary holiday trying to convince voters at public meetings of the need for a severe squeeze on spending.

He signalled his personal backing for controversial welfare reforms being drawn up by Work and Pensions Secretary Iain Duncan Smith - despite apparent Treasury concerns over the upfront costs.

The £5.2 billion annual cost of fraud and error was "the one area of ingrained waste that outranks all others", he wrote - singling out the former party leader for praise.

"Many see it as a fact of British life that we have no hope of defeating. I passionately disagree. Simply shrugging our shoulders at benefit fraud is a luxury we can no longer afford - which is why Iain Duncan Smith is working on the radical steps we can take to deal with it."