U.K. Liberal Democrats Will Resist Deep Welfare Cuts After 2015

Chief Secretary to the Treasury Danny Alexander said his Liberal Democrat party will resist pressure from its Conservative coalition partners to solely use cuts in welfare to narrow Britain’s budget deficit.

Alexander told supporters at the party’s annual conference in Brighton, England, today that he will fight any efforts to put the burden on the poor when looking for 16 billion pounds ($26 billion) of savings in the fiscal year that begins in 2015. Rich tax dodgers will be pursued, he said.

“We simply will not allow the books to be balanced in a way that hits the poorest hardest,” Alexander said. “At 220 billion pounds, welfare is a third of all public spending and, despite our painful reforms, is still rising. We will have a look at it. But that cannot, must not and will not be the only place we look.”

Alexander and other Liberal Democrat ministers are seeking to reassure supporters that their party’s ideals haven’t been watered down after two years in coalition with Prime Minister David Cameron’s Tories. Deputy Prime Minister Nick Clegg and Alexander will “negotiate hard” to make sure their party’s values shape policy.

Last year, Chancellor of the Exchequer George Osborne said Britain faces two extra years of austerity as he sought to shore up his deficit-reduction plans. Some Conservatives want welfare to take the brunt of the cuts.

Osborne faces a similar choice again this year as the economy’s inability to expand threatens to derail his deficit-reduction plans for a second year running.

No Sacrifice

Liberal Democrat Business Secretary Vince Cable yesterday raised the prospect of sharing power with the Labour Party, which wants to ease the pace of budget cuts. Alexander said today he will not “sacrifice this party’s independence by binding us to detailed spending plans deep into the next parliament.”

Instead, he pledged to raise 4 billion pounds this year by clamping down on tax dodgers.

A 950 million-pound program started two years ago is on course to yield as much as 7 billion pounds a year by 2015, Alexander said. A separate effort to track down tax avoiders with money in Liechtenstein has yielded three times as much revenue as previously expected.

“We have this message to the small minority of wealthy people who don’t play by the rules: we are coming to get you and you will pay your fair share,” Alexander said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE