David Cameron’s plans to end housing benefit for under-25s look set to be omitted from George Osborne‘s autumn statement this week after a Lib Dem revolt against more draconian benefit cuts.
Government sources suggested that the idea, floated by the prime minister in June as a way to trim a further £2bn off the benefits bill, has been fiercely opposed by the Lib Dem leader, Nick Clegg, and the Treasury chief secretary, Danny Alexander.
In another sign of wrangling between the coalition parties before Wednesday’s statement, plans by Osborne to announce a freeze on all working-age benefits have also run into intense Lib Dem opposition.
It is expected that while Osborne will move to slash the benefit bill by several billion, he will stop short of an outright freeze after strong Lib Dem objections.
Last night Greg Mulholland MP, who co-chairs the Lib Dems’ work and pensions policy committee, said his party accepted the need to make further savings where possible but there were “red lines” it would not allow to be crossed.