Liberal Democrats to veto plan for benefits freeze

Nick Clegg will veto George Osborne’s demands for a two-year freeze in most state benefits from next April and a further £10bn of welfare cuts…

The Deputy Prime Minister revealed he will block the Treasury’s demand for more cuts before the 2015 election to compensate for lower-than-expected growth. “Not a penny more, not a penny less,” he declared. [The Independent]

The message is reinforced Danny Alexander in The Guardian:

“A two-year freeze in benefits, which would freeze the incomes of the poorest people in this country, is not a place we should be looking at,” he says…

He indicates that a new wealth tax could be agreed by the coalition before the election. He also gives a strong hint that the government may shelve its fiscal mandate – debt falling as a proportion of GDP in 2015/16 – if public finances deteriorate.

Or as Vince Cable put it earlier in the week:

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