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How will the coalition justify cuts to winter fuel allowance?

In an embarrassing revelation for the Conservatives, Vince Cable has confirmed that the benefit is u

The most important detail in Vince Cable's taped indiscretion is arguably not that he sees walking out of the coalition as his "nuclear option" – that much we knew – but the confirmation that the winter fuel allowance is under threat.

Talking to two reporters posing as constituents, the Business Secretary referred to the "cack-handed" way in which the scrapping of child benefit for higher earners had been handled, and said: "They haven't yet done the winter fuel payments, but that's coming, I think."

Winter fuel payments last surfaced as a political hot potato in August, when the Financial Times reported that the Work and Pensions Secretary, Iain Duncan Smith, wanted to pare back some of the £2.7bn spent on winter fuel payments, a universal benefit paid to the over-sixties.

Yet retaining the benefit was a Conservative manifesto pledge, defended by David Cameron in the strongest terms during the televised debates:

We will keep the winter fuel allowance . . . These statements by Labour [that the Conservatives would cut the winter fuel allowance] are quite simply lies. I don't use the word "lie" very often, but I am using it today because they are lies.

The coalition agreement promises to "protect key benefits for older people", which is not the same as ring-fencing and does not preclude the possibility of restricting the number of people who qualify for them, as with child benefit.

While the coalition agreement has already shown itself to be flexible, such a U-turn on winter fuel allowance would be intensely embarrassing for the Conservatives.

It will be interesting to watch Downing Street's response to this latest claim: an outright denial that the benefit is under threat could come back to bite them, yet vagueness will also be seen as a climbdown from their previously unequivocal position.

As Britain faces the coldest winter on record and the news agenda is dominated by the "big freeze", this will be difficult to justify. We can be certain that the issue will not go away.

On a separate point, Cable's comparison of working with the coalition to "fighting a war" and his confidence that he could "bring the government down" raise questions over his future as a member of the cabinet. If he is pushed out or walks out and is replaced by David Laws, it would immeasurably tip the balance of power away from left-wing Liberal Democrats. His "nuclear" option might not have quite the desired effect.

UPDATE, 2.40pm: At a joint press conference this afternoon, the Prime Minister refused to rule out any further changes to the winter fuel allowance, saying only that the government has made its choice on the winter fuel allowance and that this won't be changing.