Cuts To Opposition Funding Axed In Govt U-Turn

The Government has performed yet another U-turn - hours after the Chancellor confirmed controversial disability benefit cuts would not go ahead, Sky News understands.

Ministers have now abandoned sharp upfront cuts to opposition funding announced by George Osborne at the time of the Autumn Statement and due to take effect next month.

The original plan was to cut so-called Short Money by 19% and then freeze the funding used to run Opposition party offices and policy development.

Instead Sky News has learnt that there will be no cut, and that funding will rise in line with CPI inflation not RPI.

New transparency arrangements to list salaries funded by short money would be introduced.

All of this was offered in a joint submission by opposition parties, first reported by Sky News.

In total, around £3m will be saved as opposed to the £11m promised when the proposals were first floated.

The opposition chief whip Rosie Winterton negotiated the deal, on behalf of the parties, and it will be put to a vote on Wednesday evening.

Opposition sources linked the reversal to the need to "play nice" with Labour over the EU referendum.

But one shadow cabinet minister said it was mainly linked to threats to withdraw parliamentary cooperation, and the spectre of the Government losing more votes.

It is the latest in a series of reverses from the Chancellor's fiscal plans, although the cost is relatively small.

A Government source said: "This is a good deal for taxpayers. We promised savings in the Short money budget and we will deliver £3.5m of savings during this parliament.

"Under the current system, the Short money budget would have risen to £10.7m by 2020 - under our reforms, the budget will now be £9.5m.

"Opposition parties will also have to tell taxpayers what they spend the money on - including publishing the salaries of senior aides."

Mr Osborne confirmed disability benefit cuts will not go ahead as he faced down MPs in Parliament for the first time since his Budget unravelled.

The Chancellor admitted he had made a mistake by including plans for £4.4bn of cuts to the Personal Independence Payments in his Budget but said he had listened and they would now be dropped.

And he added that the Government had "no further plans to make welfare savings", which would now leave a multibillion-pound hole in Mr Osborne's pledge to run a surplus of £10bn by 2019/20.