Working age benefits will have to be frozen for two years, Chancellor George Osborne declared in a fresh assault on welfare spending.

Mr Osborne told the Conservative Party conference that it was unfair that increases in State help outstripped pay rises since the start of the recession.

“Even with the reforming decisions that Iain Duncan Smith and I have taken, benefits have risen more than earnings since Labour’s great recession,” he said.

“That is not sustainable for any nation and it is not fair either.

“So I can tell you this today, working age benefits will have to be frozen for two years.

“This is the choice that Britain needs to take to protect our economic stability and to secure a better future.”

Mr Osborne said the policy would save £3 billion and would exclude disability and pensioner benefits.

He added he wanted a welfare system that is fair to those who use it and pay for it.

The best way to support people’s incomes is to make sure those out of work get a job and those in work pay less tax

Mr Osborne told delegates: “This freeze on working age benefit saves the country over £3 billion. It’s a serious contribution to reducing the deficit. Pensioner benefits and disability benefits will be excluded.

“And to those in work I say this – where is the sense in taxing you more only for you to be given some of your own money back in welfare. The best way to support people’s incomes is to make sure those out of work get a job and those in work pay less tax.”

In his final conference speech before the country chooses a new government in May, Mr Osborne urged voters to “choose the future, not the past”.

The Government’s economic plan was “working” in getting the UK back on the path to prosperity, he said, and promised “we will finish the job which we have started”.

He warned that a Labour victory in the May 2015 general election would risk pitching the country back into the economic chaos of recent years.

Mr Osborne told activists: “We need to lay out our case before the nation and ask it to choose the future, not the past.

“I believe it is perfectly possible for Britain to be the most prosperous major country on Earth, the most prosperous, the most dynamic, the most creative – but only if we, in our generation, provide the answers to the big questions, only if we choose the future, not the past.”

He tore into Ed Miliband over his failure to mention the deficit in his keynote speech to the Labour Party conference last week.

“Did you see that speech last week?” he asked, to laughs in the hall.

“Ed Miliband made a pitch for office that was so forgettable he forgot it himself.

“In all seriousness, forgetting to talk about the deficit is not just some hapless mistake of an accident-prone politician, it is completely and totally a disqualification for the high office he seeks.”

Mr Osborne insisted the economy “may mean nothing to Labour but it means everything for the people of Britain”.

“There’s a fashionable claim made these days, a claim that the link between prosperity of the national economy and the prosperity of people who live in that economy has been broken – and I want to take that head on because it is a dangerous fallacy.

“Ask the millions of people who lost their jobs, whose incomes were cut, whose aspirations were destroyed by Labour’s great recession. Ask them whether they think the link between their lives and the lives of the economy is broken and they will tell you from bitter experience they paid a heavy price for that.”

Turning to Labour’s spending vows for the NHS, Mr Osborne said: “Last week you heard promises that were built on sand.

“Let’s be clear – you cannot have a properly funded National Health Service unless you have a properly run economy. Put another way, it’s only because we are willing to take difficult decisions on spending in other departments that we are able to increase the NHS budget every year of this Parliament.

“So don’t let anyone in this party concede the NHS to Labour. They would ruin our NHS. The real party of the NHS is in this hall today.”

Warning of more austerity to come, Mr Osborne said: “I don’t stand here marvelling at how much we have done. On the contrary, I am humbled by how much we have to do. The debts that need reducing, the small businesses that need supporting, the jobless who need employing, the infrastructure that needs building, the better future for Britain that needs securing.”