In other words, reforming welfare costs money. Attempts to square the triangle have set off at least one stand-up row between the two men. It's hard to imagine the urbane Chancellor, who handles his colleagues firmly but deftly, losing his temper, let alone standing up at the same time. I worked for him during the last parliament as a shadow Treasury minister, and can scarcely remember him raising his voice. His motto tended to be: don't get angry, get even. Or rather: don't get even, get better than even.  The Work and Pensions Secretary is a different matter. As young Conservative MPs, Osborne and I helped to brief him for Prime Minister's Questions. Osborne was brilliant at the task. I was rather less so, to put it mildly. In those days, Duncan Smith was under pressure and, often, overwhelmed. Today, he is liberated by a passion and a mission. The passion is helping the poor to help themselves. After losing the leadership, he could have pushed off to make money, or try to. Instead, he plunged into learning about the lives of the deprived, setting up the Centre for Social Justice.  His mission is to put into effect his plans to get them – and keep them – in work. "His eye has the glazed certainty of the prophet who knows that he's always right," one minister told me with a touch of exasperation. It's easy to imagine him both shouting and standing up during a vexed meeting.  The deal is a bit of a win for Duncan Smith. As long as he can use some of the money clawed back from millionaires in Hampstead to support claimants in Hackney – slowing the rate at which their benefits are withdrawn in order to encourage them back into work – he's not particularly worried about the wider consequences for the Government. The proposed cuts have been pushed enthusiastically by his cheerleaders and supporters.  Osborne, however, is a political animal to his fingertips. As the man appointed late to mastermind the Conservative election campaign, he knows well how much trouble the proposed cut to Child Tax Credit – one of the very few benefit savings proposed in the Tory manifesto, and later confirmed in the Budget for families earning under £40,000 a year – caused on the doorsteps. During 13 years in office, Gordon Brown quietly but skilfully enmeshed large sections of the middle class in a gladiator's net of state dependency.  Here is the nub of the matter. Few will shed tears, let alone blood, for the right of dukes to heat their ancestral homes with the help of the Winter Fuel Allowance, or that of millionaires to subsidise school fees by means of Child Benefit. But removing benefits from the rich will neither pay off the deficit nor fund many poorer people into work. The simple fact is that to do either one has to reach far further down the income scale, and snatch away subsidies from middle-class pensioners and families.  Woe betide the government which seeks to do either. Gordon Brown was once a popular Chancellor. The rise in the state pension of only 75p in his 2000 Budget marked the start of his slide into contempt. Back in the 1980s, Keith Joseph was an important ally of Margaret Thatcher as Education Secretary. His attempt to levy tuition fees on better-off students roused the wrath of their parents and were junked. Within two years, he was no longer a Cabinet minister. When it comes to confronting lobbies, both moves were a trial run – a mere clearing of the throat, for the song that ministers are now tuning up to sing.  The Winter Fuel Payment is a typical Brown boondogle, given with his right hand to proclaim his caring credentials, while simultaneously taken with the other from the taxpayer's pocket. There is no sense removing money from people and then returning it to them, minus the sum taken by the bureaucracy set up to fund the process. The same applies to free bus passes for pensioners (which often aren't free, but subsidised by local authorities) and to the Child Tax Credit. Child Benefit is a different animal. It's essentially a tax allowance, paid to the purse rather than the wallet. There's no point in taxing a tax allowance. And, as Osborne pointed out in his Budget speech, taxing it would penalise working mothers while means-testing it would necessitate new costs. That's why he rightly froze it instead for the next three years.  All this is all very well. But it neglects two problems – one emotional, one economic.  The emotional problem is that pensioners in particular believe that they've paid into the system for what they get back. That our welfare system doesn't work this way scarcely shakes their conviction – itself understandable – that their sacrifices deserve recognition. It was with this sensibility in mind that David Cameron pledged to keep free bus passes during the election. That promise wouldn't be inconsistent with raising the age at which one qualifies for a pass to as high as 75. If the deficit's to be eliminated, such decisions will have to be made.  But if the middle classes are to shoulder part of the burden, they should also reap part of the reward. This sentiment points neatly to the economic problem. Capital Gains Tax has been raised from 18 to 28 per cent. Inheritance tax cuts have been shelved. Fiscal drag is hauling more voters into the 40p tax band. The champion of this set-up isn't Osborne, let alone Duncan Smith, but their Coalition colleague, Vince Cable. Asked recently about principles which, if breached, would cause him to quit the Government, he replied: "Fairness."  To the Business Secretary, an ex-Labour man, fairness is a code for high tax rates up the income scale – taxes that damage incentives, penalise wealth creation and bar the middle classes from seeing light at the end of the recession's tunnel. If they're to lose their benefits now, their taxes should be cut later. And what's halting the prospect isn't the glint in the eye of Iain Duncan Smith, but the twinkle in that of Vince Cable.
Someone has to pay for getting welfare claimants into work and cutting the    deficit, says Paul Goodman.