How Cameron and Clegg could reach a deal on cutting pensioner benefits

The coalition could pledge to means-test benefits from April 2015 and promise to increase them the previous year to ensure no one is left out of pocket.

With both Labour and the Lib Dems no longer committed to preserving universal benefits for pensioners, what's preventing the Tories executing their own U-turn? The answer is David Cameron's 2010 "read my lips" pledge to protect them (ironically made under pressure from Labour), which was subsequently included in the Coalition Agreement. After seeing the damage inflicted on the Lib Dems by their volte face over tuition fees, Cameron is determined to avoid anything that could provoke claims of betrayal, not least due to the renowned power of the grey vote (the demographic among which UKIP is performing strongest). 

But as Nick Clegg pointed out on The Andrew Marr Show yesterday, the coalition's pledge to "protect key benefits for older people such as the winter fuel allowance, free TV licences, free bus travel, and free eye tests and prescriptions" only applies up to May 2015, while the current Spending Review is concerned with the 2015-16 spending period. The difficulty for Cameron is that six weeks of the period fall before the next general election, meaning any decision to means-test them would technically breach his pledge. As a result, Tory hopes of further welfare cuts, which would allow the government to limit cuts to areas such as policing and defence, have evaporated. As Clegg again stated yesterday, he is only prepared to consider additional cuts (such as the abolition of housing benefit for 25-year-olds and the limiting of child benefit to two children) if the coalition "starts at the top" by curbing benefits for the wealthy. In response, the Tories reaffirmed Cameron's 2010 pledge: "David Cameron promised to protect the benefits for pensioners who've worked hard and done the right thing - and we've kept that promise. Conservatives want to do more to fix the welfare system so that it works for the hard-working people who pay for it."

But with the Treasury still only a third of the way to meeting its Spending Review target of £11.5bn cuts (a total that will be far harder to reach with welfare cuts off the table), it's worth noting one way the coalition could resolve this conundrum. The government could announce that one or more of the benefits will be means-tested from April 2015 and increase payments to pensioners the previous year to ensure no one is left out of pocket. While administratively complex, this would offer the coalition a chance to break the deadlock on welfare. As Philip Hammond, Vince Cable and others battle to protect their departments from the full force of Osborne's axe, it's exactly the kind of imaginative compromise both sides might be tempted to explore. 

Deputy Prime Minister Nick Clegg makes a speech at the G8 Open for Growth - Trade, Tax and Transparency conference at Lancaster House in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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New Digital Editor: Serena Kutchinsky

The New Statesman appoints Serena Kutchinsky as Digital Editor.

Serena Kutchinsky is to join the New Statesman as digital editor in September. She will lead the expansion of the New Statesman across a variety of digital platforms.

Serena has over a decade of experience working in digital media and is currently the digital editor of Newsweek Europe. Since she joined the title, traffic to the website has increased by almost 250 per cent. Previously, Serena was the digital editor of Prospect magazine and also the assistant digital editor of the Sunday Times - part of the team which launched the Sunday Times website and tablet editions.

Jason Cowley, New Statesman editor, said: “Serena joins us at a great time for the New Statesman, and, building on the excellent work of recent years, she has just the skills and experience we need to help lead the next stage of our expansion as a print-digital hybrid.”

Serena Kutchinsky said: “I am delighted to be joining the New Statesman team and to have the opportunity to drive forward its digital strategy. The website is already established as the home of free-thinking journalism online in the UK and I look forward to leading our expansion and growing the global readership of this historic title.

In June, the New Statesman website recorded record traffic figures when more than four million unique users read more than 27 million pages. The circulation of the weekly magazine is growing steadily and now stands at 33,400, the highest it has been since the early 1980s.