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 1667.

    In principle I agree with Balls' proposal, but given that the payment is £200 per household of two with one qualifying pensioner, or £100 each if both householders qualify, how will he organise it if one pensioner is above the tax threshhold and the other not? Has this been thought through? I suspect not, a bit like the rest of Labour's fiscal policies!

  • rate this
    -3

    Comment number 1666.

    @Polly8122

    "State mediated orthodoxy collectivism" is intended to parody TMR's viewpoint as some pre-Berlin Wall Communist ideology"

    Parody? Pejorative?

    Then I suggest that you have another read of TMR's comments because it is an extremely accurate description of their contents.

    It's you who thinks that it sounds too much like Communism.

    Do tell us - why has that hit a nerve?

    No straw man!

  • rate this
    0

    Comment number 1665.

    I guess its Ed No - Balls when it comes to taking on Amazon, Apple and Starbucks.

  • rate this
    0

    Comment number 1664.

    Okay Mr Balls - if you really mean it...why not remove tax relief from professional and union subscriptions. That would be worth quite a few hundred million in savings per year - or is it just the same old - punish the rich token rhetoric!

  • rate this
    +1

    Comment number 1663.

    Now I am not saying that this Forum has been hijacked by clones from Tory Central Office
    But as all the opinion polls put Labour around 10% ahead of the Tories, and 70% of the population think the Tory Economic polices are failing and favour the rich.

    Isn't it a teeny weeny bit suspicious that all of the top 10 ranked postings are anti Labour rants and all of the bottom 10 are pro this policy?

  • Comment number 1662.

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

  • rate this
    0

    Comment number 1661.

    "a much bigger % of people hope for a good income in retirement (but will never get it). Hence he alienates 25%+ of people and only saves 5%"

    The miscalculation is that a large, entitled demographic will not put up with deductions being made from their special privileges; privileges the following generations will pay for but will not vaguely see for themselves.

  • rate this
    +1

    Comment number 1660.

    The idea that you get what you pay in is long gone. Benefits are for those with no other means of surviving and they already take-up all that is 'paid-in' by others.

  • rate this
    -2

    Comment number 1659.

    1569.Trout Mask Replica
    Don't look on your neighbour with envious eyes. Voluntary Welfare is more effective and moral than Forced Welfare.

    Look on your neighbour with loving, not green, eyes. Aspire to emulate their success, not to steal what they worked so hard for. Share in their success, don't rob them of it, that leads to eternal war between us - a most unhappy prospect.
    See comment 1563.

  • rate this
    -1

    Comment number 1658.

    Blair & Mandy have been advising the Eds to add substance to map out what labour are for not just what they are against. Consequently we have ed balls speech on 'iron discipline' and the winter fuel payments and Milliband telling google about Willy Wonka & ethics. I tend to agree with Mr Balls about winter fuel, but I'm not sure the eds attempt at substance can be judged a great success.

  • rate this
    +5

    Comment number 1657.

    I agree with Ed

    (and whats more my post has not been moderated lol)

  • rate this
    -1

    Comment number 1656.

    None of the objectors to this sensible policy have given rational arguments. Instead as per usual its all 'me' based. Aggressive Individualism will destroy the planet and destroy this nation. US social models are an insult to christain decency and morality.
    2 things threaten this nation.
    1. Overpopulation, we are increasing our imports of food
    2. Greed of the Rich US style.

  • rate this
    0

    Comment number 1655.

    Even as a social democrat, I really do wish Ed Balls would leave his role. I also wish Yvette Cooper would go too. Both must make a great couple as they seem to have much in common, opportunistically speaking.

  • rate this
    -5

    Comment number 1654.

    Ed Balls is aptly names don't you think.

  • rate this
    -3

    Comment number 1653.

    Do they want to encourage people to save for their own futures, or to rely on the state for their money when retired?

    Means testing just encourages people not to bother saving, and just spend now, and rely on the state when you fall on hard times or retire.

  • rate this
    +2

    Comment number 1652.

    @1631.Lord Horror

    "Do you know what a Straw Man fallacy is?"

    Yes.

    How can feedbackloop's comment be a misrepresentation?

    The misrepresentation is done via the pejorative language used;

    "State mediated orthodoxy collectivism" is intended to parody TMR's viewpoint as some pre-Berlin Wall Communist ideology. Suggesting people work together for a common good is not the same thing.

  • rate this
    -2

    Comment number 1651.

    Is this all Balls can think of? He's had years in government and years in opposition and, eureka!, he has figured out how to save an amount which equates to .008% of our national debt. That similar to a man with a £100,000 mortgage boosting his repayment ability by £8 a year. It's a joke.

  • rate this
    -1

    Comment number 1650.

    It depressed me to hear all the pensioners that couldn't give a stuff when families like us (single wage earner, none working wife, big tax contributions) lost all child benefit on the grounds that Osbourn thinks we are rich. How comforting to know they have suddenly rediscovered their convictions that universal benefits should exist when they are about to lose their own annual £140 freebie.

  • rate this
    +2

    Comment number 1649.

    Whether it's Balls/Osborne/Other capitalism will always continue to discriminate, it is a flawed idea, only the true wealthy benefit because they own the means of production. Yet still people believe that there is a right and wrong way and never for a moment think there has to be a better way!

  • rate this
    -1

    Comment number 1648.

    Like the 50% tax hike . Its nothing to do with , which option generates the most revenue , what is based for the long term or its this fair on those who have saved. Its the only saving he can offer up to his TUC mates, because he can say "They are rich, they can afford it !!"

    This is why it DOES NOT PAY TO WORK , don't work and everything is free for life !! Its a no brainer !

 

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