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.

Grant Shapps on the campaign trail. Photo: Getty
Show Hide image

Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.