<p><br /> David Cameron has delivered his strongest hint yet that "middle class" benefits could be squeezed in order to fund a major overhaul of the welfare state.<br /> </p><p><br /> The Prime Minister fuelled speculation that child benefit could be means-tested by suggesting some universal payouts were no longer "affordable".<br /> </p><p><br /> As the Tory conference kicked off in Birmingham, it was confirmed that a deal had been struck between Work and Pensions Secretary Iain Duncan Smith and Chancellor George Osborne over root-and-branch reform.<br /> </p><p><br /> The two men had clashed repeatedly over how to fund amalgamating dozens of benefits into a "Universal Credit", with the heavy up-front costs causing alarm in the Treasury as the coalition struggled to slash budgets.<br /> </p><p><br /> Speaking on the BBC's Andrew Marr Show, Mr Cameron praised the "refreshingly radical" plan and said the price tag was being reduced by introducing the changes "progressively" over two parliaments.<br /> </p><p><br /> The premier denied there would be "losers" from the reforms, but also stressed it would be impossible to tackle the deficit without "making savings in the welfare budget" - which accounts for one pound of every three it spends.<br /> </p><p><br /> Although he refused to give details of where cuts would fall ahead of the Comprehensive Spending Review on October 20, Mr Cameron said: "On the one hand we have got to ask, are there some areas of universal benefits that are no longer affordable?<br /> </p><p><br /> "But on the other hand let us look at the issue of dependency where we have trapped people in poverty through the extent of welfare that they have."<br /> </p><p><br /> He went on: "I think it is very important that there are universal benefits. We pay into this system, that is why I want a really good state pension system. We are the first government in a long time to link the pension back to earnings."<br /> </p><p><br /> Mr Cameron's refusal explicitly to back any universal payouts apart from the state pension will heighten speculation over the fate of child benefit.<br /> </p><p><br /> It has been estimated that stopping the payments when children reach the age of 16 rather than the current limit of 19 would save £2 billion a year.<br /> </p>
