Ed Balls: Labour would axe wealthy pensioners' fuel cash


Shadow chancellor Ed Balls: "In tough economic times we have to make difficult choices about priorities"

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Labour would cut winter fuel payments for the UK's richer older people if they won the next general election, shadow chancellor Ed Balls has said.

It would affect about 600,000 people over 61 who pay higher and top income tax rates - saving about £100m.

Labour may also curb new free schools and police commissioners to save money.

Mr Balls said it would be "completely irresponsible" for Labour to pledge higher spending in 2015-6, given the likely "bleak" state of the finances.

Chancellor George Osborne will announce the details of future spending plans for 2015-6 - the period immediately before and after the expected date of the next election - later this month and Labour has been under pressure to do the same.

Mr Balls told an audience at the headquarters of Thomson Reuters in London that he could not predict what the financial situation would be in two years.

But he said he would show an "iron discipline" and, at this stage, expected to "work within" the coalition's current spending forecasts for the period in question.


He said the coalition's current policies would leave a future Labour government with "a bleak inheritance", and promised a "tough deficit reduction plan", coupled with more action to strengthen the economy.

"We will inherit a substantial deficit. We will have to govern with much less money around. We will need to show an iron discipline.

Start Quote

On Budget Day in just two years' time the man holding the red box outside No 11 may be Labour's Ed Balls. That will only happen if he can restore Labour's economic credibility”

End Quote

"The last Labour government was able to plan its 1997 manifesto on the basis of rising departmental spending in the first years after the election. The next Labour government will have to plan on the basis of falling departmental spending."

While not spelling out spending commitments in detail, he insisted the party's manifesto at the next election would include "tough fiscal rules" and his colleagues would be expected to focus on "re-prioritising money within and between budgets" rather than additional spending.

Mr Balls said the winter fuel allowance was a "vital" source of help for pensioners on low and middle incomes but in the current climate Labour had to strike the right balance between "universal and targeted support".

"So at a time when the public services that pensioners and others rely on are under strain, it can no longer be a priority to continue paying the winter fuel allowance to the wealthiest pensioners," he said.

Important symbol

The BBC's political editor Nick Robinson says that although the saving from the winter fuel allowance pledge is small, it is meant as a symbol of his acceptance that day to day Whitehall spending will continue to fall under Labour.

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The problem with Labour cutting winter fuel for rich is where does the attack on universalism stop”

End Quote Peter Hain Former Labour minister

The winter fuel allowance has proved a controversial measure because it is paid regardless of income.

Prime Minister David Cameron pledged during the last general election campaign not to cut welfare measures directed at pensioners.

But the Conservatives have come under pressure from their Liberal Democrat coalition partners, who want to see benefits for wealthy older people addressed before deeper cuts to the wider welfare budget can be considered.

Treasury minister Sajid Javid said the government had made clear there would be no change to the winter allowance and other pensioner benefits in this Parliament but insisted "a lot of other tough decisions" had been made on welfare.

Labour's overall economic policy was essentially "unchanged", he added, and would lead to "more borrowing, more spending and more debt".

Benefits shake-up

Dot Gibson, from the National Pensioners' Convention, said the move could set a "very dangerous" precedent and call into question other historic entitlements such as free bus passes for pensioners and even universal access to the NHS.

And, writing in the Guardian, former Labour minister Peter Hain said the "problem with Labour cutting winter fuel for rich is where does the attack on universalism stop?"

Mr Balls also said Labour's 2015 manifesto would ask tough questions about spending in a range of areas.

"With primary school places in short supply in many parts of the country, and parents struggling to get their children into a local school, can it really be a priority to open more free schools in 2015 and 2016 in areas with excess secondary school places," he said.

"When we are losing thousands of police officers and police staff, how have we ended up spending more on police commissioners than the old police authorities, with more elections currently timetabled for 2016?


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  • rate this

    Comment number 1527.

    Balls can say what he likes, its doubtful if his party will be elected to government any time soon, probably not for the next couple of terms anyway.
    Isn't it great how they come up with all these strategies when out of office, but when they can do something sensible in office, they haven't a clue what is the right thing to do, except fill in the expenses claim.

  • rate this

    Comment number 1526.

    "The last Labour government was able to plan its 1997 manifesto on the basis of rising departmental spending"

    Was it? My recollection was that the 1997 manifesto was to retain the Tory reduction spending strategies until 2000 - at which time Tony & Gordon unbuttoned the purse & started an unbridled 10 year spend & borrow spree! Does Mr Balls really think the public have short term memory loss?!

  • rate this

    Comment number 1525.

    Part of the problem with this means testing of benefits is it is the higher rate tax payers that are funding most of these benefits in the first place. What happens if they suddenly decide that Labour's idea of fairness - that higher tax payers fund benefits but do not receive them - is not fair and stop paying?

  • rate this

    Comment number 1524.

    The gold selling nonsense again, gold has gone down 500 dollars - did Osborne sell any reserves at the high mark - err no. did he get 10 times more than the gold sale (hindsight loss) on the communication licences as Gordon Brown did - no he mede a complete and utter mess of it and got a fraction of the true worth or did the usual cronies deals.

  • rate this

    Comment number 1523.

    For Balls, of all people, to be lecturing anyone on anything is utterly bizarre.

    The man's a joke, an integral part of the Labour idiocracy that got us into this mess in the first place. Labour was happy with loopy salaries in the City and senior public sector - how can parasites at the BBC justify 450K salaries, etc - and with waste, and benefits dependency.

  • rate this

    Comment number 1522.


    Yes i do see the problem"

    At least have a go at answering, instead of ignoring the point.

    You want all tax on all profits made on sales INTO the UK by foreign companies but also want all tax on all profits made on sales OUT OF the UK by UK companies?

    That really is fantasy economics.

    But if we give up tax on profits on UK overseas sales how are we benefiting?

  • rate this

    Comment number 1521.

    leave universal benefits alone!

  • rate this

    Comment number 1520.

    With the IT technology available to us now it should not be a difficult task to have targeted benefits to each individual dependent on circumstances and the amount of contributions made.

  • rate this

    Comment number 1519.

    Ah! Spendthrift Labour Balls has found something people who get it wouldn't mind losing it and sounds like they'll adhere to austerity. Truth is the labour party is full of champagne socialist who's sole aim is nothing more than a career for themselves in politics, this is all part of the attempt to get votes. Just look at the mess they got us into with their financial mismanagement last time.

  • rate this

    Comment number 1518.

    This just seems like a pathetic knee-jerk reaction because, after all their ridiculous commitments to provide jobs for long term unemployed, reinstate jobs of police, teachers and nurses etc. Labour cannot think of any other ways to cut the deficit. If they were serious they would drop the free TV licences for the 'wealthy'; this seems more of a luxury than the Winter Heating allowance.

  • rate this

    Comment number 1517.

    #1503. Councils aren't the most impressive organisers but there's a slight flaw in your argument. Binmen are council employees NOT private companies. Even if they did they can negotiate bulk contracts

    I'm curious what you'd suggest though? Call a refuse firm and pay £50 everytime you want the bin emptied. And when you lose your job you just let the rubbish pile up outside the house?

  • rate this

    Comment number 1516.

    @1449. Mrday

    anyone who disagrees with means testing is either rich, deluded or just greedy - thats the tory voter then LOL.


    So former Labour minister Peter Hain is a Tory voter is he?

    Ha ha ha ha ha ha ha ha ha

    I suggest you engage brain before writing.

  • rate this

    Comment number 1515.

    Andy The Thinker

    What about iron discipline when you sold our harriers off for a £1 each! (they are being used by the Americans!)

    More Tory pie in the sky thinking The harriers which were being upgraded under Labour were sold off to the Americans in the strategic arms review which as we all know was done under the Tories.

    Think a bit harder Mr Thinker

  • rate this

    Comment number 1514.

    Getting there but not going far enough. ALL benefits must be means tested and apart from disability payments they should be 'in kind' via food vouchers and meeting essential bills such as electricity and water rates.

  • rate this

    Comment number 1513.

    1485. I'm not sure what economics you did in 1971 but it sounds like normative bunk to me!

    Bring on 1984!

  • rate this

    Comment number 1512.

    I'm not in receipt of a winter fuel allowance, but struggle to pay my fuel bills which keep rising all the time irrespective of the austerity and "everyone is in it together"
    I'm interested in Ed Balls observation about the deficit Labour may inherit if elected.
    I thought CONDEMS were on a deficit reduction plan or will "we" have had 5 years of pain for no gain come the 2015 General election?

  • rate this

    Comment number 1511.

    So, judging by the ratings, the general consensus amongst the good burghers of HYSland seems to be "I'm alright Jack - pull up the ladder".
    Makes one quite ashamed to be British.
    For shame - the unacceptable face of the petit (petty?) bourgeoisie, deluding themselves into thinking that hating the poor will sort the deficit.

  • rate this

    Comment number 1510.

    1484.Cynical Dave

    I think you'll find most of the people who ruined this country are now retired on staggering pensions from RBS, HBOS etc in the region of £500k per year (brought down from £700k per year).

    Young people have had the cheek to go to school, get an education find no jobs and find out we're screwed because of the greed of the newly retired rich!

    cynical or stupid?

  • rate this

    Comment number 1509.

    It sounds harsh but we cannot go on looking after pensioners. By stopping the winter fuel allowance completely we could not only save the allowance but as the pensioners freeze of cold the pensions themselves.

  • rate this

    Comment number 1508.

    I refuse to be lectured on state benefits by a guy who, with his wife, took every penny they possibly could by playing the MP's expenses system.

    When it came to 'flipping' homes there are none cannier than Mr and Mrs Balls.


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