The two ways George Osborne may get £12 billion out of the welfare budget

There are a lot of questions being asked today about George Osborne's numbers in yesterday's Budget and it is not hard to see why.

The Chancellor reckons he is going to get £12 billion out of the welfare budget in the next parliament, but how?

This year, we will spend £167.5 billion on welfare, £93 billion of which goes on pensions and pension credits, which the Chancellor has promised not to touch.

Of the remaining £74 billion, £18 billion goes on Housing, which is not a very tempting target given how emotive it has already been as an issue and that many of the benficiaries are people in work (whose side the Tories are very keen to say they are on).

Then you have the Disability Living Allowance and the Employment Support Allowance, which are an even less politically appealing source of savings.

Watch: 'The Chancellor needs to explain his budget'

Admittedly, he has already got £2 billion from the promised benefit freeze and he could target Job Seekers Allowance, which he might claim is justified given the rapid decline in the unemployment figures.

But getting by on £72.40 a week is not easy as all those on it will testify and cutting back further would certainly energise the Tories' opponents.

So I think there are two possibilities:

• 1) That the Chancellor has a trick up his sleeve we haven't forseen. Raising the retirement age, for example, saved a lot of money and created relatively little political controversy

• 2) One way or another, he doesn't intend to do it. Either because he thinks the economy will strengthen still further and this will get him out of the hole, or he will find the money from elsewhere