After party leader Nick Clegg suggested on Tuesday he would like to see universal benefits cut as part of efforts to find an estimated £16bn of extra cuts, his Energy Secretary Ed Davey yesterday gave his own backing to the plan.
The issue is hugely contentious within the coalition as it was squarely ruled out by Prime Minister David Cameron before the 2010 general election.
But Mr Clegg and his Lib Dem colleagues believe it is only fair that wealthy pensioners are hit before the poorest lose more in the next round of benefit cuts.
Mr Davey said: “Let’s make clear what Nick has said. He’s said when we have got tough times, when everyone is tightening their belts, actually, does it make sense to pay pensioner benefits to millionaire pensioners? The millionaire pensioners who are getting winter fuel allowance and bus passes – is it right that when they have already got a million pounds, the state is spending money to give them an extra benefit?
“I don’t think people think that’s a sensible use of money when times are tough. That’s about making priorities. We’ve made clear that when it comes to future spending decisions the people at the top are the ones we should go to first to make sure that they pay their fair share.”
Pressed on whether this would mean tearing up the coalition agreement, he said: “The point is, that’s talking about after this Parliament of course, and therefore we could go to the country on that proposed budget.
“But let’s be clear, Liberal Democrats in government have been on the side of people on low and middle incomes who are struggling, taking two million of the people who are lowest paid out of income tax altogether, with large income tax cuts for people on low and middle incomes.”