Tim Farron has committed to a soft Brexit deal, a referendum on a final deal, and tax-funded public spending

Lib Dems pledge to outflank Corbyn on reversing welfare cuts

By Chaminda Jayanetti

The Liberal Democrat manifesto has committed to scrapping the freeze on benefits and injecting more than twice as much money into welfare as Labour.

Tim Farron's party has been struggling to gain traction as the 'party of Remain' in an election campaign where the two main parties have largely avoided addressing the specifics of Brexit.

The headline pledge in the party's manifesto, published today, was a restated commitment to hold a referendum on a final Brexit deal, with the alternative of remaining in the EU also on the ballot.

The manifesto also commits to keeping free movement of people and membership of the single market and customs union as part of any Brexit deal.

But the party is also committing to spending £14bn a year extra on public services, raised by increasing income tax across the board along with reversing cuts to corporation tax and capital gains tax.

As part of their spending package, the Lib Dems are pledging to axe the freeze on benefits which means they lose value as inflation rises. Experts are worried that the freeze will cause a major hit to living standards among people on low incomes in the coming months.

The manifesto also commits to reversing cuts to the family element of tax credits and scrapping the two-child limit on payments, which is the source of the controversial 'rape clause'.

Notably, both commitments were absent from Labour's manifesto published yesterday, despite Jeremy Corbyn having run for the Labour leadership on a platform of opposing benefit cuts.

Corbyn then said he would ditch the benefit freeze at the manifesto launch, before U-turning on this just an hour later.

The Lib Dems are also committing to go further than Labour in reversing cuts to universal credit. Overall they are planning to inject more than twice the money into the welfare system as Labour – an extra £9.7bn a year compared to an extra £4.6bn a year.

However, neither party is planning to raise or scrap the cap on welfare payments to households.

When in power as part of the Tory-led coalition from 2010-15, the Lib Dems voted through a raft of benefit cuts including the bedroom tax, cuts to council tax benefit, housing benefit and tax credits, as well as presiding over a disability benefit testing system that wrongly denied benefits to thousands of people, and a job centre sanctions system that saw benefits docked for hundreds of thousands of jobseekers.

From around 2013, the party started blocking attempts by the Conservatives to impose further cuts to welfare, having grown disillusioned by the lack of progress on proportional representation and House of Lords reform.

The Lib Dems are not matching Labour's commitment to extend the Personal Independence Payment disability benefit, although they are pledging to axe the Work Capability Assessment for disability benefit applicants, as well as the bedroom tax. Labour is committed to both.

The independent Institute for Fiscal Studies noted in its commentary on the Lib Dems' manifesto, "in comparison with the Liberal Democrats, Labour’s plans for benefits are modest". The IFS today published the following comparison of the two parties' welfare commitments:

Farron's party is promising to spend an extra £6.3bn a year on the NHS and social care – lower than the £7.7bn touted by Labour, but more than currently lined up by the Conservatives, who have yet to publish their manifesto.

However, the Lib Dems are committing far less money to education than Labour – £8.7bn a year compared to Labour's £25.3bn a year.

This is largely because the party is not committing to cut university tuition fees, which they controversially voted to treble as part of the coalition in 2010 months after campaigning to scrap them in the general election.

Nor are the Lib Dems committing to invest in Sure Start children's centres or free further education, unlike Labour.

Instead of making pledges on fees, the Lib Dems will launch a review of university finance to consider any necessary reforms "in the light of the latest evidence of the impact of the existing financing system on access, participation and quality".

The Lib Dems will bring back maintenance grants for students, like Labour, and will also scrap "all cuts to front-line school and college budgets, protecting per-pupil funding in real terms" and extend free childcare for all two-year-olds.

Farron is also committing to lifting the public sector pay cap.

The party says its manifesto is fully costed for day-to-day revenue spending, with money raised by adding a penny to all rates of income tax and dividends tax, reversing planned cuts to corporation tax and cuts to capital gains tax, and legalising and taxing cannabis. The Lib Dems say they will eliminate the deficit on revenue spending by 2020 – earlier than both the Conservatives and Labour.

The party is ready to borrow in order to invest £100bn in infrastructure.

Chaminda Jayanetti is covering the general election for Politics.co.uk. He tweets here.