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.

'Symbolic'

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.

Start Quote

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
    0

    Comment number 1567.

    All government handouts should be means-tested, including the state retirement pension. No taxpayers money should go to people or organisations that do not need it. Universal benefits are a licence for the poor to subsidise the rich.

  • rate this
    +1

    Comment number 1566.

    Didn't Liam Burne leave a note for the incoming treasury minsters about there being 'no money left'? That's what Ball and Labour did last time they were in power. Collectively, they are a financial disaster zone who should not be allowed to run a Jumble Sale ......

  • rate this
    +3

    Comment number 1565.

    @1546.pete "I have worked and paid NI & tax for 50 years so i have done my bit to contribute now labour suggest taking that away"

    Labour introduced the winter allowance to make up for the 17.5% VAT that the last Tory Government added to domestic fuel in 1996. They also reduced VAT to 5%. If they hadn't we would all now be paying 15% more for our electricity and gas.

  • rate this
    +1

    Comment number 1564.

    As and when, a UK government enacts laws and tackles the obscene greed paid in the form of salaries, share holdings, pensions and bonuses within the private and public sectors, would I ever agree to the suggestion that the winter fuel payment be stopped as a universal benefit whatever your income. Chase the fat cats, the tax avoiders and raise the income tax rate for the richest, problem solved!

  • rate this
    +3

    Comment number 1563.

    1517.Peter_Sym
    "I'm curious what you'd suggest though?"
    =
    Well, if ASDA can deliver groceries to my door for £3, I imagine if I got together with my neighbours, or if I lived in an apartment building - the strata committee, We could probably get our trash collected for much less as an economy to scale really came into effect!

    Heaven forbid we talk to our neighbours to our mutual benefit. Xx

  • Comment number 1562.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    -2

    Comment number 1561.

    1522.AndyC555

    Isn't it incompetent governments who create tax systems so complicated that it makes legitimate tax reduction easy for companies? After all, directors have a legal duty to protect the interests of shareholders.

    There's a big difference between the tax that a company should pay and that of what governments would like them to pay.

  • rate this
    0

    Comment number 1560.

    Better get some policies out - it looks like this present bunch are going to be out Very Soon

  • rate this
    -2

    Comment number 1559.

    1525.drdjday
    "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."

    Oh we pay so much tax they bleat thinking we forget that they only pay so much tax because they have so much damn income in the first place and plenty that isn't taxed at all thanks to friendly tax loopholes.

  • rate this
    +3

    Comment number 1558.

    A pure political gesture with little financial impact. He has simply taken it away from those he thinks are unlikely to vote Labour. There are still millions who simply do not qualify for welfare based on need. Do away with it completely add the money saved to the state pension.The money will then be taxed progressively. Government collects tax and reduces admin costs.

  • rate this
    +2

    Comment number 1557.

    I like the Green policy of a minimum income for everyone but have to much common sense & know it's unaffordable. The welfare system does need reform but undermining it by attacking those who have paid in will just hasten it's demise. Maybe limiting child benefit to two children would be better no need to have more than two kids but everyone gets old.

  • rate this
    +2

    Comment number 1556.

    @Trout Mask Replica

    "where your libertarian nirvana has ever been successfully put in practice"

    In the music of the great Captain Beefheart whose highly individualised eccentricity was completely at odds with the craven conformity you seem to be in favour of. This seems to have gone above you!

    Generally, his country, the US, is more economically libertarian than the UK and considerably richer.

  • rate this
    -1

    Comment number 1555.

    Means testing must make a come back - we have never truly been able to afford universal benefits.

  • rate this
    +1

    Comment number 1554.

    1543

    That is possibly because Balls is so closely associated with the country's economic car crash in 2008.

    He was wasn't looking where he was going at the time.

  • rate this
    -1

    Comment number 1553.

    1522.AndyC555

    No what i want is a tax system that is fit for purpose and not one that is being abused by networks of obscure fantasy companies , loans etc etc that are set up with the sole purpose of avoiding taxation.

    Dont answer your question for me i dont want what you suggest i do at all

    and your solution is ? carry on as we are ?

  • rate this
    0

    Comment number 1552.

    How can pensioners in higher tax brackets possibly qualify for benefits? Surely this misappropriation of funds should be stopped.

    I can understand a pensioner bus pass for all, to ease travel and reduce possible age related accidents, but come on . . let's get real!

  • rate this
    +6

    Comment number 1551.

    i am not wealthy.i will not be a wealthy pensioner, but i don't have a problem with anyone who has paid into the system,probably over many years,getting what they are entitled to,wealthy or not.it's called a contract mr balls.someone pays in and,in return,gets back what they are entitled to.leave it to the individual to decide on whether or not they accept it.that's called democracy mr balls

  • rate this
    +5

    Comment number 1550.

    1528.Cynical Dave

    Ah, no drinking and unemployment is your day eh? Strange though, you do wonder who raised this 'hopeless' generation?

  • rate this
    +3

    Comment number 1549.

    1540.
    jgm2

    a winter fuel payment that was set up solely to prevent elderly people dying from hypothermia'

    No. It was set up by Labour to buy the votes of the elderly

    If that's the case why haven't the Tories removed it.

  • rate this
    +1

    Comment number 1548.

    Taxes in the UK are far too high, if we didn't tax everyone so heavily we could all save money, not just for our old age but for a 'rainy' day which unfortunately does happen. It's time to rethink our welfare state as there are some who leave school go on benefits and stay on benefits until they die

 

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