LibDems would cap working age benefit rises at 1%

13 Apr 15

Liberal Democrat leader Nick Clegg has set out plans to cap annual increases in working age benefits at 1% as part of plans to close the deficit by the end of 2017/18.

Setting out the party’s pledges to balance the books ‘with a heart as well as a brain’, Clegg said there was a need to cap increases in working age benefits at 1% for a further two years from 2016/17, in addition to the three-year restriction currently in place.

This would save £160m, he said, while a pledge to remove Winter Fuel Payment and free TV licences from pensioners who are higher rate taxpayers would raise £125m.

Clegg said the LibDems had set out who would be asked to contribute more and were being open and honest about what was necessary to deal with the deficit fairly by 2017/18.

Other pledges included ending some exceptions on Capital Gains Tax, which was expected to raise £700m, and aligning taxation of dividends with the taxation of income to bring in £1.2bn in revenue.

As well as allowing the party to reduce the deficit – it has pledged to balance the cyclically-adjusted current budget in the next parliament – these changes would also allow additional money to be made available for the NHS’ Five Year Forward View plan.

Ahead of the party’s manifesto launch on Wednesday, Clegg said the party would cut less than the Conservatives and borrow less than Labour.

‘It’s a plan to protect our economy and invest in our schools, hospitals and public services... a plan with a heart as well as a brain,’ he said on Sunday.

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