Lib Dems vow to block Tory welfare cuts plan in any coalition talks

The Liberal Democrats have outlined their key demand in any coalition negotiations with the Conservatives with a promise to block plans by George Osborne to impose £12bn of welfare cuts in the next parliament.

As Nick Clegg launched the Lib Dem manifesto – with a pledge to act as the heart of Tory-led government or the head of a Labour-led one – the party’s policy chief said it would be impossible to sign up to Osborne’s welfare cuts.

David Laws, the Lib Dem education minister who chaired the group that drew up the manifesto, said: “It is impossible to see how we would want to sign up to that. We have identified some welfare savings but we are not prepared to go down the Tory route.”

The remarks by Laws were the clearest indication to date of how the Lib Dems would approach coalition negotiations with the Tories. The Lib Dems say they have no preference between Labour and the Tories though Laws said that many people would worry that Labour cares about people but has little credibility on managing the public finances.

In a sign of the depth of Lib Dem thinking about coalition negotiations, Laws’s rejection of Osborne’s welfare cuts contrasted with less clear-cut language about the Tory demands for a referendum on Britain’s EU membership. This suggests that the Lib Dems may be able to give ground on the referendum if the Conservatives row back on their welfare cuts.

Asked whether the Lib Dems would seek to block an EU referendum on Cameron’s timetable, Laws said: “Voters are entitled to know what are the things that are really really important to them that they they would expect to vote for that party to deliver.

“But it is not sensible or possible for us to go through every other party’s manifesto and pick off every single policy and tell you what our position is when we don’t know the outcome of the election.”

Laws spoke out after Clegg set out five red lines in any future coalition talks as he launched the Lib Dem manifesto at a darkened rave venue in Battersea, south London.

Launching his manifesto to party members and taking only one media question at the event, Clegg said to cheers that his party in coalition would “add a heart to a Conservative government and a brain to a Labour one”.

Avoiding the phrase “red lines” he nevertheless said the five pledges on the front page of the party’s manifesto are “our top priorities”. Clegg added: “These are the things we will fight tooth and nail for in the next parliament. And make no mistake, this is a programme for government, not opposition.”

The five top priorities are:

• A £12,500 personal tax allowance.

• A balanced budget on the current account by 2017-18 which would be done “fairly”.

• £8bn extra spending for the NHS including equal status for mental health.

• A real terms increase in education department spending in line with increase in pupils by 2020.

• Five green laws including decarbonisation of electricity.

The tax, macroeconomic and health policy are exactly in line with stated existing Conservative policy, but the green laws and extra spending on education takes Clegg’s party closer to Labour.

Overall the 153-page manifesto, drawn up under the guidance of Laws and subject to the party’s internal democracy, has a centre-left flavour and far more detail than offered by any other major party.

Laws made clear that the Lib Dems would make use of the word “fairly” on the front page of their manifesto on balancing the budget as the basis for rejecting Osborne’s £12bn of welfare cuts.

The Lib Dems have suggested welfare cuts of £3bn as part of a £27bn fiscal consolidation to balance the budget by 2017-18.

The Lib Dem minister said: “We have looked ourselves in government at the unprotected welfare budget – the bit that is not pensions. To find savings of the scale that the Tories are suggesting you would have to do things like make massive absolute cuts to the level of disability benefits, you’d probably have to means test child benefit way down the income distribution, you’d have to make huge cuts to the benefits for young people including those in employment.”

Laws said Osborne was refusing to spell out the details of the planned cuts because his original plan – to use the indexing of benefits to inflation – would now only yield £1bn of cuts in light of low inflation rates. The consumer prices index, used for the indexing of benefits, stands at 0%.

Laws said: “The reason why he has failed so far to come up with anything like a credible plan for welfare cuts that he has been willing to tell you about is you cannot do that without taking serious amounts of money from very vulnerable people.

“We are not prepared to do that ... What is on the front page of our manifesto is: ‘balance the budget fairly’. You cannot balance the budget fairly on the back of £12bn of welfare cuts for people on lower and middle incomes.

“You just cannot do that. So fairly must mean having a significant contribution from those people at the upper end of the income distribution and some of those businesses that just don’t pay their fair share in taxes but employ very good tax advisers to get around paying a sensible contribution.”

The Lib Dem minister said it would be “insane” for the party to lay down red lines for coalition negotiations.

“It would be an insane way of managing a negotiation when we don’t know what we will have after the next parliament, so we are not using the language of red lines and non-red lines.”

But Laws made clear the front page of the manifesto include the “five priority policies ... we would be determined to deliver if we did coalition”. He said the next parliament would be “blighted” by an EU referendum but he indicated that the Lib Dems would not block a vote.

Laws, an “Orange Book” Lib Dem on the centre-right of the party, said the Lib Dems had no preference between Labour and the Tories.

But he was noticeably more critical of Labour as he said: “There is, amongst a lot of people in the country, a worry about Labour which has not just been there under the present leadership team but for as long as I can remember.

“They are a party that people can easily associate with compassion for the poor and underdogs but they have never been a party that has persuaded people they are serious about wealth creation and the economy and managing public finances in a credible way ... Labour are people who care a lot but aren’t always the people you’d want to entrust with your money.”

Powered by article was written by Nicholas Watt and Patrick Wintour, for on Wednesday 15th April 2015 15.40 Europe/ © Guardian News and Media Limited 2010