The Chancellor has defended his budget, saying that cuts in public expenditure are a "sensible approach" to reducing the deficit.

"Taxes do the early work," George Osborne told Today presenter Evan Davis, but "if you want to tackle the structural change, then I think you have to tackle the root cause of the problem which was a decade of over-spending".

Mr Osborne has previously said that eradicating the deficit by 2014 is "unavoidable". But he disagreed that his choice of words was politically motivated.

And he agreed that the 25% planned cuts for the Home Office would be "a real challenge."

"You have to identify savings across the board," he said. The government's spending review "will decide what functions the state can longer perform".

In addition, Mr Osborne said that the cross-the-board reduction in departmental spending "doesn't have to be 25%" if savings can be found in welfare costs.

And he disagreed that there was a gulf between pre- and post-election rhetoric on the scale of the cuts.

"We set out specific examples of tax credits and now in the budget we have implemented a reduction in tax credits for middle earners: we set that out in the TV debates."

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