Nine Lib Dems rebel as Osborne's welfare bill clears another hurdle

Charles Kennedy, Sarah Teather and seven others vote against bill capping benefit increases at 1 per cent for each of the next three years.

The coalition's Welfare Benefits Uprating Bill (artfully renamed by Andrew Rawnsley as "The Make Labour Look Like the Party for Skiving Fat Slobs bill"), which introduces a 1 per cent cap on benefit increases for each of the next three years, comfortably made its way past the Commons last night, with MPs voting by 305 votes to 246 to give the bill a third reading. 

When MPs first voted on the bill earlier this month there were six Lib Dem rebels. Four of the party's 57 MPs - Julian Huppert, John Leech, Sarah Teather, David Ward - voted not to give the bill a second reading, while Andrew George and Charles Kennedy formally abstained by voting in both lobbies. Last night this total increased to nine. Below, I've listed those who voted against the bill and, where applicable, have included how far up they appear on Labour's target list of 106 seats. The Conservatives intend to target 20 Lib Dem seats at the general election but have yet to release a full list. 

1. Andrew George (St Ives)

Majority: 1,719

2. Martin Horwood (Cheltenham)

Majority: 4,920

3. Julian Huppert (Cambridge)

Majority: 6,792

Labour target 103

4. Charles Kennedy (Ross, Skye and Lochaber)

Majority: 13,070

5. John Leech (Manchester Withington)

Majority: 1,894

Labour target 31

6. Alan Reid (Argyll and Bute)

Majority: 3,431

Labour target 64

7. Adrian Sanders (Torbay)

Majority: 4,078 

8. Sarah Teather (Brent Central)

Majority: 1,345

Labour target 23

9. Mark Williams (Ceredigion)

Majority: 8,324

The most notable moment in the debate came when Labour's shadow employment minister Stephen Timms was asked whether it was his party's policy that benefits should be uprated in line with inflation, rather than by 1 per cent (a real-terms cut). Timms replied: "Uprating should indeed be in line with inflation, as it always was in the past." He later added: "We reject the proposal to restrict the uprating of social security and tax credits to 1% in our view, as I have already said uprating should be in line with inflation and it should be assessed as it always has been at the end of the preceding year." 

Timms's words were significant because, as I noted yesterday, Labour's amendment to the bill simply called for the cancellation of the 1 per cent rise, rather than for benefits to rise in line with the Consumer Price Index as normal. The Tories leapt on his statement as proof that Labour was committed to inflationary rises in benefits for the next three years. The party's Tiggerish chairman Grant Shapps commented: "Labour have committed to pay for more generous benefit rises with more borrowing and more debt. That’s exactly how they got us into this mess in the first place. Labour haven’t learnt and would do it all over again."

But Labour has since argued that Timms's words only reflected the party's existing position of increasing benefits in line with inflation this year (2013-14) and did not amount to a commitment to do so in 2014-15 and 2015-16. As the BBC's James Lansdale notes, on 6 January Ed Balls told Sky News: "The normal thing is to index and the government would normally have indexed in line with inflation and to be honest, I think that would be fair." He added: "It's not responsible for me as a shadow chancellor to come here two and a half years ahead and tell you what we can do about taxes or spending or benefits."

So, in other words, nothing has changed. But expect the Tories to continue to challenge Labour to give a much clearer indication of how it would behave in 2015. 

Former Liberal Democrat leader Charles Kennedy was one of nine Liberal Democrat MPs to vote against the Welfare Benefits Uprating Bill. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Budget 2017: What announcements will Philip Hammond make?

What will the first budget after Brexit hold for the economy?

This spring’s Budget - set to be announced on Wednesday 8 March 2017 - will be forced to confront the implications of last June's Brexit vote, along with dealing with issues of reliance on consumer spending, business rates and government borrowing. The government also (quietly) announced on Monday night that it will be asking ministerial departments to outline cuts up to 6 per cent, a potential nod for what’s to come next week.

All these things, along with the fact the Chancellor Philip Hammond is scrapping the spring Budget, meaning this announcement should be an interesting one.

The big story at the moment focuses on borrowing. The Resolution Foundation has predicted that healthier-than-expected tax revenues and the lack of a Brexit effect so far will lower Budget borrowing forecasts by £29bn between 2015-16 and 2020-21. 

The FT reports a possible £3bn reduction in borrowing, to £67bn. They also pin this optimistic prediction to higher-than-average self-assessment tax receipts, after changes in the taxation of dividends.

The Chancellor will potentially stick to the three key changes he made from George Osborne’s former financial commitments, according to The Sun. These consist of not predicting a surplus in 2019/20, slightly relieving the cap on welfare spending and no longer committing to reducing debt. The paper also predicts he’ll announce a change to the controversial business rates that were recently released, that could leave “shopkeepers and publicans clobbered with tax hikes of up to 400 per cent".

What do we know for sure?

The government has announced a few key changes in in advance of the Budget.

  1. The Spring Budget 2017 will be the final Budget held during springtime
  2. Finance Bill will follow the Budget, as it does now
  3. From 2018 "Legislation day" will move to the summer
  4. An Autumn Budget means tax changes will be announced well in advance of the start of the tax year
  5. 2018 will see the first Spring Statement