How the Lib Dems broke their promise to block new welfare cuts

The party vowed to block further welfare cuts but the seven-day wait for benefits amounts to a £245m cut.

Before the Spending Review, the Lib Dems repeatedly stated that they would accept no further cuts to welfare. Danny Alexander said in February 2013: 

We've got no plans at all to go back to the welfare budget as part of that process [the Spending Review]. What I'm focused on is finding that £10 billion or so from within the spending the government departments do.

I've got no plans to reopen the welfare issue. We agreed significant measures in the autumn and we're legislating for those at the moment. The balance has to be found from departmental budgets. Everyone's got to play their part.

More recently, Nick Clegg said that he was prepared to consider new cuts but only if George Osborne began by removing benefits, such as Winter Fuel Payments and free bus passes, from wealthy pensioners. "I believe that if you’re going to reopen welfare, it’s only fair to work at the top and work down, not start at the bottom and work up," he said

When Osborne and Cameron responded by reaffirming the Tories' 2010 pledge to protect all pensioner benefits, it appeared welfare spending was off the table. The Chancellor had already taken £21.6bn from the mostly poor and would take no more. 

But when he addressed the Commons yesterday, Osborne did announce further benefit cuts - and he started at the bottom. The new seven-day wait before the unemployed can claim benefits will reduce spending by £245m in 2015-16 (and £765m by 2018). Though some may seek to present it as a "reform", it is a cut. The money that claimants lose from having to wait a week for their benefits (which will force thousands more to turn to food banks) will not be backdated; it has gone for good. The introduction of tougher interview requirements is also expected to reduce spending (by £120m in 2015-16), presumably since those who fail to turn up (often with good reason) will be sanctioned.

It's true that Osborne also announced plans to remove Winter Fuel Payments from pensioners who live in hot countries (defined as those with "an average winter temperature higher than the warmest region of the UK") but this hardly qualifies as a significant reduction; it will save just £30m a year. 

Clegg insisted he would only accept new welfare cuts if the majority of savings came from the wealthy, but, once again, it's the poorest who've been hit. 

Danny Alexander and Nick Clegg at last year's Liberal Democrat conference in Brighton. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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