Danny Alexander: Lib Dems won't allow regional benefits

David Cameron dropped regional benefits from his speech but that doesn't mean the idea's dead

It was the non-announcement of the week. Excised from the prime minister's speech, but lurking in the background; should people in different parts of the country be paid different levels of benefits?

The media was briefed that it would be in the speech, but when it was delivered the sentence referring to regional levels of benefit had gone.

But of course by then the issue was running.

And although it was not in the speech, Employment Minister Chris Grayling fuelled the fire by saying it was "entirely sensible" to debate whether benefit levels should be set on a regional rather than national basis.

Benefits bill

The argument is that people on benefits in regions like the north east are more likely to stay on them because wages are lower than in the south.

Of course, any change could also help to cut the benefits bill too.

It is now becoming clear, though, why the PM decided not to mention it.

Liberal Democrats were briefing that they had blocked it, and now Treasury Chief Secretary Danny Alexander has come out openly to say it's not something that will happen under the coalition.

And he also made it clear that the idea of regional public sector pay rates (or local market-facing pay as he referred to it) is also a distant and unlikely prospect.

In a visit to Teesside he said: "There is absolutely no prospect of the government introducing regional benefits.

"We have been looking at local market-facing pay in the public sector. That is an issue which we have referred to the individual pay review bodies to consider.

"But they would have to be come up with some pretty overwhelming evidence for us to move in that direction.

"In terms of regionalising benefits, for me as a Liberal Democrat, it's just a non-starter."

Beyond 2015

I think we can say that's that then before 2015, as Danny Alexander is one of the inner committee of cabinet members that have to sanction coalition policies.

But of course it does not mean the prospect of regional benefits has gone away altogether.

Much of David Cameron's speech this week was about looking beyond 2015 at what the Conservatives might do if they were in sole control of the country.

Some Conservatives say there should be a debate about whether to introduce regional benefits

Regional benefits might yet become a Conservative, if not a coalition, policy.

Of course, supporters make a case for why regional benefits might benefit the north east.

Encouraging people back to work might help boost the private sector.

But I am guessing northern Conservatives will feel as nervous about the idea as they have done about regional pay.

They will hope the PM steers clear, given the poor poll ratings the party already has in the north.

Insult to injury

Some in the north east certainly see it as an attempt to pick on poorer regions.

Kevin Rowan, from the Northern TUC, said: "This is a particularly vicious and vindictive attack on people in the north by an increasingly cruel Conservative-led government.

"Welfare benefits provide a very basic and essential safety net for the most vulnerable in society.

"Now the prospect of real terms cuts to social security for those in the north east only adds insult to injury. We are not second class citizens and will not be treated as such.

"The prime minister is lashing out at the victims of his failed policies rather than adopting a credible and humane plan for jobs, growth and a future that works."

Of course some Conservatives could rightly point out that Labour has flirted with the same idea, proposing a regional benefit cap during the debates about the government's Welfare Bill.

Labour denied the suggestion it ever indicated it backed regional levels of benefits.

So for the moment, the idea may lie in abeyance. But come manifesto time, it'll be interesting to see whether it makes a comeback.