Who are the Lib Dem welfare rebels?

Four Lib Dems, including Sarah Teather and Julian Huppert, voted against the bill and two abstained.

As expected, the coalition's Welfare Uprating Bill, which introduces a 1 per cent cap on benefit increases for each of the next three years, passed comfortably in the Commons last night, with MPs voting in favour of the bill by 324 to 268, a majority of 56. There was, however, a small but notable Lib Dem rebellion.

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. Of these six, three - George, Huppert and Kennedy - voted against Labour's amendment to introduce a jobs guarantee for the long-term unemployed, while the others abstained.

Three senior Lib Dems - Norman Baker, Lynne Featherstone and Chris Huhne - did not take part in the vote.

Below is a full guide to how the rebels voted and their reasons for doing so. Four of the MPs in question - Huppert, Leech, Teather and Ward - appear on Labour's new target list of 106 seats. The Conservatives intend to target 20 Lib Dem seats at the general election but haven't yet released a full list.

Andrew George (St Ives)

Abstained

Majority: 1,719

In his speech in the Commons, he said: "We do not know…what food price inflation will be in, for example, 2016. We are being asked to predict what the circumstances will be in the context of the rather arbitrary figure of 1%. I simply urge my right hon. Friend to keep an open mind, and to have a means by which we will uprate that is fair to both benefit recipients and those in work"

Julian Huppert (Cambridge)

Voted against

Majority: 6,792

Labour target 103

He tweeted last night: "I just voted against the Welfare Benefits Up-rating Bill 2nd Reading. Vulnerable people need support."

Charles Kennedy (Ross, Skye and Lochaber)

Abstained

Majority: 13,070

He tweeted last night: "I formally abstained frm voting for a 2nd reading and am looking now to work with like-minded Lib Dems to amend the bill in its later stages."

John Leech (Manchester Withington)

Voted against

Majority: 1,894

Labour target 31

In a blog entitled "Why  I will be a rebel tonight", Leech wrote:

"I find it objectionable that the Tories are ramping up the  “Skivers Vs Strives” rhetoric to justify a benefit cut to 7 million working families.

If you are one of those 7 million, you have made your choice to work. You should be encouraged by the system, whether that be through benefits or tax breaks.  That is why I strongly support rises in the tax threshold.

I accept the system should be simple, transparent and easy to understand. And it certainly isn’t now. But a cut to these working families will wipe out most of the gains these families will see through increases to their tax allowances.

And that is why I will be rebelling tonight."

Sarah Teather (Brent East)

Voted against

Majority: 1,345

Labour target 23

In her speech in the Commons, she said: "Percentages do not buy milk, bread or school uniforms—pounds and pennies buy those things, and it is in pounds and pennies that people will experience a cut.

"I do not enjoy voting against my own party, and I cannot vote for the Labour amendment, but with a very heavy heart I shall be voting against the Second Reading of the Bill. I hope that I, and any others who choose that course of action, will give the Government some cause for thought and reflection."

David Ward (Bradford East)

Voted against

Majority: 365

Labour target 10

In his speech in the Commons, he said: "I suspect, deep down, that far too many people on this side of the House believe that unemployed people are the undeserving poor, that they need to sort themselves out, and that we cannot possibly reward them with an increase. Let us remember, too, that this is not an increase. When inflation is taken into account, the measure will simply freeze the level of benefits that we have already decided will provide people with a minimum standard of living. The measure is not fair, and I will not support it."

Former Liberal Democrat leader Charles Kennedy abstained from voting on the Welfare Uprating Bill. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The Future of the Left: A new start requires a new economy

Creating a "sharing economy" can get the left out of its post-crunch malaise, says Stewart Lansley.

Despite the opportunity created by the 2008 crisis, British social democracy is today largely directionless. Post-2010 governments have filled this political void by imposing policies – from austerity to a shrinking state - that have been as economically damaging as they have been socially divisive.

Excessive freedom for markets has brought a society ever more divided between super-affluence and impoverishment, but also an increasingly fragile economy, and too often, as in housing, complete dysfunction.   Productivity is stagnating, undermined by a model of capitalism that can make big money for its owners and managers without the wealth creation essential for future economic health. The lessons of the meltdown have too often been ignored, with the balance of power – economic and political – even more entrenched in favour of a small, unaccountable and self-serving financial elite.

In response, the left should be building an alliance for a new political economy, with new goals and instruments that provide an alternative to austerity, that tackle the root causes of ever-growing inequality and poverty and strengthen a weakening productive base. Central to this strategy should be the idea of a “sharing economy”, one that disperses capital ownership, power and wealth, and ensures that the fruits of growth are more equally divided. This is not just a matter of fairness, it is an economic imperative. The evidence is clear: allowing the fruits of growth to be colonised by the few has weakened growth and made the economy much more prone to crisis.

To deliver a new sharing political economy, major shifts in direction are needed. First, with measures that tackle, directly, the over-dominance of private capital. This could best be achieved by the creation of one or more social wealth funds, collectively held financial funds, created from the pooling of existing resources and fully owned by the public. Such funds are a potentially powerful new tool in the progressive policy armoury and would ensure that a higher proportion of the national wealth is held in common and used for public benefit and not for the interests of the few.

Britain’s first social wealth fund should be created by pooling all publicly owned assets,  including land and property , estimated to be worth some £1.2 trillion, into a single ring-fenced fund to form a giant pool of commonly held wealth. This move - offering a compromise between nationalisation and privatization - would bring an end to today’s politically expedient sell-off of public assets, preserve what remains of the family silver and ensure that the revenue from the better management of such assets is used to boost essential economic and social investment.

A new book, A Sharing Economy, shows how such funds could reduce inequality, tackle austerity and, by strengthening the public asset base, rebalance the public finances.

Secondly, we need a new fail safe system of social security with a guaranteed income floor in an age of deepening economic and job insecurity. A universal basic income, a guaranteed weekly, unconditional income for all as a right of citizenship, would replace much of the existing and increasingly means-tested, punitive and authoritarian model of income support. . By restoring universality as a core principle, such a scheme would offer much greater security in what is set to become an increasingly fragile labour market. A basic income, buttressed by a social wealth fund, would be key instruments for ensuring that the potential productivity gains from the gathering automation revolution, with machines displacing jobs, are shared by all.  

Thirdly, a new political economy needs a radical shift in wider economic management. The mix of monetary expansion and fiscal contraction has proved a blunderbuss strategy that has missed its target while benefitting the rich and affluent at the expense of the poor. By failing to tackle the central problem  – a gaping deficit of demand (one inflamed by the long wage squeeze and sliding investment)  - the strategy has slowed recovery.  The mass printing of money (quantitative easing) may have helped prevent a second great depression, but has also  created new and unsustainable asset bubbles, while austerity has added to the drag on the economy. Meanwhile, record low interest rates have failed to boost private investment and productivity, but by hiking house prices, have handed a great bonanza to home owners at the expense of renters.

Building economic resilience will require a more central role for the state in boosting and steering investment programmes, in part through the creation of a state investment bank (which could be partially financed from the proposed new social wealth fund) aimed at steering more resources into the wealth creating activities private capital has failed to fund.

With too much private credit used for financial speculation and property, and too little to small companies and infrastructure, government needs to play a much more direct role in creating credit, while restricting the almost total freedom currently handed to private banks.  Tackling the next downturn, widely predicted to land within the next 2-3 years, will need a very different approach, including a more active fiscal policy. To ensure a speedier recovery from recessions, future rounds of quantitative easing should, within clear constraints, boost the economy directly by financing public investment programmes and cash handouts (‘helicopter money’).  Such a police mix – on investment, credit and stimulus - would be more effective in boosting the real economic base, and would be much less pro-rich and anti-poor in its consequences.

These core changes would greatly reform the existing Anglo-Saxon model of capitalism and provide the foundations for building support for a new direction for progressive politics. They would pioneer new tools for building a fairer, more dynamic and more stable economy. They could draw on experience elsewhere such as the Alaskan annual citizen’s dividend (financed by a sovereign wealth fund) and the pilot basic income schemes launching in the Netherlands, Finland and France.  Even mainstream economists, including Adair Turner, former chairman of the Financial Services Authority, are now talking up the principle of ‘helicopter money’. For these reasons, parts of the package are likely to prove publicly popular and command support across the political divide. Together they would contribute to a more stable economy, less inequality, and a more even balance of power and opportunity.

 

Stewart Lansley is the author of A Sharing Economy, published in March by Policy Press and of Breadline Britain, The Rise of Mass Impoverishment (with Joanna Mack).