Clegg: 'Rich Pensioners May Lose Benefits'

Nick Clegg has called for wealthy pensioners to lose free bus passes and the winter fuel allowance as he tries to revive his party's fortunes.

The Deputy Prime Minister, in a major speech on the welfare state, insisted the Government has an "absolute duty" to ensure the system is fair to all.

He said this means not paying out to "people who do not need it" and "looking again at universal benefits paid to the wealthiest pensioners".

Such a move would lead to means-testing for the winter fuel allowance, free bus travel, prescriptions and television licences.

David Cameron has committed to keeping universal benefits in place until 2015 but many Tories are keen for reform.

Following his deputy's speech, his spokesman said: "The Prime Minister made a commitment to protect those benefits and he believes in keeping his promises."

Mr Clegg admitted the benefits shake-up had been "painful and controversial" at times but he claimed the Lib Dems had ensured it was firmly anchored in the political centre ground.

"When two thirds of people think the benefits system is too generous and discourages work then it has to be changed, or we risk a total collapse in public support for welfare existing at all," he told the Centre Forum think tank.

"We need welfare protection for people who fall on hard times. Of course. But you cannot ask low income working people to pay through their taxes for people who aren't in work to live more comfortably than they do."

Mr Clegg sought to put distance between the Lib Dems and the Tories by pointing out that he blocked bids to cut housing benefit for the under 25s and to only pay child benefit for the first two children in a family.

The speech, to the Centre Forum think tank, comes on the eve of his fifth anniversary as Lib Dem leader and as the party battles a major slump in support.

He is under intense pressure as further polls show his party has been pushed into fourth place behind the UK Independence Party (Ukip). One poll had Ukip on 14%, ahead of the Lib Dems on just 8%.

Deputy leader Simon Hughes has admitted that "there is a little bit of chatter" about the leadership because of the dismal poll ratings.

Meanwhile, Mr Clegg's former director of strategy Richard Reeves has revealed the leader is attempting to win back votes by setting out the Lib Dem position well before coalition announcements are made.

In an attempt to turn the tide before local elections next May, Mr Clegg apparently wants to show the "inner workings of government" but this will inevitably strain the partnership.

Mr Reeves, writing in The Guardian, suggests the coalition could collapse before 2015 if the tactic fails.

"2013 is the year the Liberal Democrat strategy - deliver, then differentiate - will be tested," he said.

"A more assertive stance in act two of coalition should mean greater support and more votes. If not, the curtain will probably fall on the coalition before 2015."

Mr Clegg conceded that governing in difficult times had meant the party acquiring a "harder edge" but said the alternative was "a retreat to the comfort and relative irrelevance of opposition".

In his address, he suggested many Conservatives believe everyone out of work is "a scrounger" - a jibe at Chancellor George Osborne who said Government should support "strivers" not "shirkers".

"The siren voices of the Tory right who peddle this myth could have pulled a majority Conservative government in the direction of draconian welfare cuts," he said.

He declared that the Tories wanted to implement an extra £10bn in welfare cuts but were kept down to £3.8bn by the Lib Dems, branding some of the earlier plans "extreme".

Labour deputy leader Harriet Harman said: "Nick Clegg will try every trick in the book to distance himself from the record of his Government.

"But, as ever with the Lib Dems, they say one thing whilst doing another - resulting in a record of economic failure, trebled tuition fees, nurses cut,police axed and millions paying more while millionaires get a tax cut.

"Bearing this in mind, what we really should be hearing from Nick Clegg is a proper apology and a declaration that from now on he will actually stick by the promises he makes."