Iain Duncan Smith: cut welfare to fund police and Forces
Iain Duncan Smith has offered to cut Britain’s welfare Bill by up to another £3 billion annually to protect spending on the Armed Forces and police, The Telegraph can disclose.
The Work and Pensions Secretary has personally contacted the Defence and Home Secretaries to set out the details of the proposed cuts after they raised concerns about the impact on national security of further spending reductions.
Mr Duncan Smith is understood to have offered to restrict housing benefit for the under-25s, and to limit state payments to families with more than two children.
Both proposed cuts were publicly floated by the Prime Minister last year, but were thought to be off the agenda during this Parliament.
The discussions over further welfare cuts took place before last Wednesday’s suspected terror attack in Woolwich, which is expected to lead to renewed pressure on the Treasury to protect security spending.
The Liberal Democrats have pledged to block any further working-age benefit cuts, but will now come under intense pressure from some Conservatives to reverse their opposition ahead of next month’s Spending Review.
The private talks between the three Conservative Cabinet ministers are expected to cause renewed tensions within the Coalition.
A senior Conservative source said: “It is now a simple choice, Iain Duncan Smith has offered a deal which will protect the country’s security.
“The Liberal Democrats will block it — and it will be for them to explain why it is more important for teenagers to be given council flats rather than for the nation and its citizens to be protected.”
Whitehall negotiations over the forthcoming spending review, which will set out public expenditure across government for the 2015-16 financial year, are some of the most bitter that have been conducted in recent times.
George Osborne, the Chancellor, has ordered that government spending be cut by £11.5 billion in 2015-16, but several areas of expenditure including health, schools and international development are protected.
Welfare expenditure is not being formally discussed because last year the Coalition agreed to cap rises in benefit payments at one per cent annually.
This means that so-called unprotected departments, including the Ministry of Defence and Home Office, are being forced to bear the brunt of the cuts. Defence spending is facing a reduction of about £1.6 billion and the Home Office is facing £800 million of new cuts.
In an interview with The Daily Telegraph earlier this year, Philip Hammond, the Defence Secretary, said that there was a “body of opinion within Cabinet who believes that we have to look at the welfare budget again”.
He also warned that Britain’s security may be in jeopardy if there were further defence cuts, saying: “In my judgment, and I think the Chancellor and the Prime Minister would both agree with this, the Armed Forces are at the smallest level that is appropriate for the kind of defence posture that we have set out in the SDSR [2010’s Strategic Defence and Security Review].
“It isn’t clear to me that we could go any smaller while retaining the range of capabilities and commitments that the SDSR requires of us.”
It is understood that Theresa May, the Home Secretary, also raised concerns in Cabinet about the impact of the further cuts she was being asked to find.
Both Mr Hammond and Mrs May are not thought to have drawn up plans for the level of reductions requested by the Treasury.
In the wake of Mr Hammond’s interview, Mr Duncan Smith is understood to have contacted him and Mrs May with the offer of new welfare cuts. It is not known if the trio have yet attempted privately to lobby the Liberal Democrats.
In an interview with this newspaper in March, Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, said that the police and Armed Forces would be cut as he would not sanction any more welfare reductions.
The Lib Dems have indicated that they will not allow working-age handouts to be reduced again unless the Conservatives drop their opposition to means-testing some benefits paid to pensioners, including the winter fuel allowance.
The Spending Review has become necessary because the Government’s austerity programme is lasting longer than expected as a result of the lacklustre economic recovery. The decisions taken will have an impact weeks before the next general election, meaning that both Coalition parties are keen to ensure their different priorities are reflected.
Tonight, Mr Duncan Smith declined to comment on his proposed benefit cuts. A Treasury source played down expectations of a new round of welfare reductions in the Spending Review.
