Isabel Hardman Isabel Hardman

Lib Dems block further welfare cuts

One popular prediction swirling around Westminster this morning is that part of the Government’s response to the GDP disaster will be to cut more money from the welfare budget. After all, George Osborne told MPs in his Budget statement that there would need to be a further package of £10 billion cuts in welfare spending over the period of the next spending review, and the IMF has made similar noises, too.

But I understand that this is not going to happen because the Liberal Democrats will not let it go through. Sources are emphatic that those at the top – Nick Clegg, Danny Alexander et al – have blocked the £10 billion of cuts for this parliament. ‘It’s just not going to happen,’ says one senior party figure.

One of the reasons it is possible for the party to be so emphatic on this subject is that next year’s comprehensive spending review will not go ahead in the traditional sense at least. Newsnight reported recently that Treasury figures felt they were going through the motions on the planning, because it will be near-impossible for either party – but especially the Lib Dems – to go into an election campaign in 2015 wedded to compromised spending plans that their own voters are uncomfortable with. That this was going to happen was plain from the publication of the Coalition Agreement onwards: there is already in black-and-white an agreement that the Liberal Democrats can ‘continue to make the case for alternatives’ to Trident, which means one chunk of the spending review document has always been in doubt.

How to approach the CSR is still the subject of much discussion.

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