The Conservatives' proposals for welfare reform are grounded in the rhetoric of the idle poor rather than the reality of low-paid, hardworking families. George Osborne and Iain Duncan Smith wrote in their article for the Daily Mail that the burden of £10bn in welfare cuts will be borne by jobless parents with large families and unemployed youngsters.

As Osborne later told the Tory faithful: "How can we justify giving flats to young people who have never worked, when working people twice their age are still living with their parents because they can't afford their first home?

"How can we justify a system where people in work have to consider the full financial costs of having another child, whilst those who are out of work don't?"

However, the policy prescriptions outlined in the piece won't meet the ambitious targets that the chancellor describes. Take the role of families in the welfare system, which since its inception has recognised that the state might need to lend a helping hand to those with children. Today most of those receiving benefits and tax credits for their children are actually in work.

Of the children in households receiving tax credits, 6.5 million are in working families while less than half that number live in homes without work. To get serious money in savings the cuts would have to go deep. About 330,000 out-of-work families have at least three children, and the Institute for Fiscal Studies calculates that to save £1bn a year would require entitlements to be cut by an average of £3,000 per family for this group.

Of course, the chancellor and the secretary of state for work and pensions may be taking away the extra support for each child in the family – a point Osborne made on the BBC on Monday morning. "You automatically get extra money when you have a child, so you can be better off," he said. "We are just asking the question, does that work? Is that the right value [to] have in our society?"

The cut is particularly unkind as the result is that the state penalises children on the arbitrary basis of how many brothers and sisters they have – a decision out of their hands. And it goes without saying that the costs of a new child massively outweigh any extra income from benefits and tax credits.

What is also clear is that there is not much money in all this. The cap on benefits for out of work households saves, according to the Children's Society, a relatively measly £250m per year.

Nor is the housing benefit cut going to raise much cash: there are 380,000 under-25s claiming housing benefit; only 166,000 are single and childless. These either cannot live at home because of a broken down relationship or are among the one in seven who have work and are already on the shared accommodation rate. The total bill for housing benefit for the under-25s is £1.8bn a year, so the measure might raise a few hundreds of millions of pounds.

Now it is true that Iain Duncan Smith has fought a rearguard action to prevent The Treasury from cutting even more – some say £20bn – from the welfare budget. It's also the case that in a time of austerity there can be no holy cows in welfare. Of the £120bn social security budget, £10bn represents a reduction of a little more than 8%.

What the Tories have displayed is a nasty, authoritarian streak. There is a moral absurdity in telling people that some children are worth more to the state than others, and a ridiculous state of affairs where the government could be forced to compel parents to look after adult children. Last year, according to Crisis, 10,000 young people became homeless after being thrown out by their parents. It's one thing to tell young people they have to go back home, but what if their home does not want them?