DAVID Cameron has again refused to identify where he plans to cut £12billion from the welfare budget, but it seems likely that a slashing of tax credits will be at the forefront of the impending changes.

A leading charity warned yesterday that his legacy in office would be “the largest rise in child poverty in a generation”.

Delivering a speech on welfare, the Prime Minister also refused to rule out cutting disability benefits. In a robust ideological defence of austerity politics, he argued that, left untouched, the deficit would cause hardship for the poorest.

Too often, the Prime Minister said, welfare was being used to “present the veneer of fairness”.

Cameron said: “What we have seen in the past is that governments respond by thinking much of the answer is to redistribute money through the tax and benefit system giving families an extra pound here or there so they move from just below the poverty line to just above it.

“I don’t underestimate for one second the difference that extra money can make. But that isn’t extending opportunity. It’s papering over the cracks, using welfare to present the veneer of fairness.”

The Prime Minister promised to “double down” on his reforms and indicated that his government would lower the benefit cap and remove “perverse” incentives for jobseekers.

Children’s charities were quick to criticise. Alison Garnham for the Child Poverty Action Group said: “No moral mission involves taking away tax credits for our poorest children. No serious plan for the low paid begins with making them poorer by cutting their tax credits.

“You can’t have one nation if children’s lives, opportunities and life chances at every turn are shaped and limited by poverty. The government’s child poverty approach is failing but the Prime Minister’s speech today simply missed the point and failed to set out what his government will do to prevent his legacy being the largest rise in child poverty in a generation”.

Julia Unwin from the Joseph Rowntree Foundation said: “Tax credits are a vital tool to prevent people’s incomes slipping so low that their health, education and prospects are damaged.

“To deliver on the government’s ambition to reduce the welfare bill productivity needs to be improved, employers need to pay higher wages, more affordable housing needs to be built, and the markets need to make sure the poorest people are not disadvantaged.

“Addressing these causes will help reduce the need for people on low incomes to rely on tax credits to support their incomes. Cutting welfare in isolation, without addressing the causes of poverty, will mean many families on low incomes will face increased hardship and insecurity”.

Rob Gowans from Citizens Advice Scotland said that Tory reforms had already caused working families to lose tax credits.

Gowans said: “For the last few years the CAB service has seen first-hand the problems that the welfare reforms have caused for vulnerable people in Scotland, and we are concerned at the impact that further cuts will have. Following previous changes to the tax credits system in 2012, we know that 97,300 fewer working families in Scotland have received tax credits. That’s a fall of 27 per cent. Over that same period, Scottish CABs saw a 12 per cent increase in the number of new cases related to tax credits.”

Responding to the PM’s speech, SNP MSP Linda Fabiani said: “David Cameron’s rhetoric and his government’s actions are completely at odds – he talks about wanting a high-wage economy whilst keeping the minimum wage low and failing to sign his own government up to the Living Wage.

“Instead of boosting the minimum wage, ending the failed commitment to austerity and investing in jobs and infrastructure, David Cameron’s big idea to strengthen the economy is to cut another £12bn from the welfare budget as his attack on the working poor and vulnerable people intensifies.

“The Tory plans aren’t just economically illiterate – they are morally wrong and show exactly why we need full powers over the economy and social security transferred to Scotland.”

During work and pensions questions in the Commons, Iain Duncan Smith again refused to rule out any cuts to disability benefits.

The National Deaf Children’s Society warned that any move to reform disability benefits could see deaf children “condemned to isolation”.

A spokesman said: “Families with deaf children who rely on DLA are not the ‘benefit scroungers’ of popular folklore – they are families working hard to support their children, often in very challenging circumstances. We know that deaf children can achieve as much as their hearing peers given the right support, but if that support is removed we risk going back to the dark ages when deaf children were condemned to a life of isolation, loneliness and underachievement”.