Key Cameron ally urges scrapping of universal pensioner benefits


Key Cameron ally, Nick Boles, urges scrapping of universal pensioner benefits ahead of next election - watch Allegra's Newsnight report

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A close ally of the prime minister is calling for the winding up of universal benefits to better off pensioners at the next election as he urges a shift to only policies which he believes will raise the productivity and competitiveness of the UK's workforce.

Conservative MP Nick Boles is also urging a significant further scaling back of tax credits and housing benefit, and a re-examination of the "lazy sentimentalism" of the Sure Start programme of children's centres.

Mr Boles will appear on Newsnight on Monday to propose ways his party can best address the decline in living standards, faltering in the UK for the last decade.

Previewing ideas he will set out in full with a speech on Tuesday to the independent Resolution Foundation - whose work is devoted to diagnosing the problems affecting low to middle income earners - Mr Boles proposes a philosophical shift that should guide the next round of spending cuts due for 2013 or 2014.

He will say that only those tax and spending policies that can explicitly be seen to increase competitiveness of the UK workforce should be supported.

The ultra-modernising MP has worked alongside the current Conservative leadership since opposition.

He founded the think tank Policy Exchange - a petri dish of ideas for the Conservative leadership - and though the ideas in his speech to the Resolution Foundation are his own, he is close to many leading members of the government and suggests the next wave of Conservative ideas being contemplated as all parties consider further public spending cuts.

His proposal to re-evaluate the effectiveness of Sure Start will be uncomfortable for his Liberal Democrat coalition partners. Mr Boles is the parliamentary private secretary to Schools Minister Nick Gibb, in the education department which has oversight over Sure Start.

Mr Boles has devoted much energy to considering the issues affecting those on low to middle incomes as they struggle to keep their earning power up in the face of downward trends in earnings and living standards afflicting all developed economies.

In his speech Mr Boles will say: "It is my contention that politicians - of all parties - have barely begun to wrestle with the implications of the stagnation in living standards or confront the agonising choices that we will be forced to make in the decades to come."

He believes:

  • The housing benefit budget, which has risen to £22bn a year, should be cut further: "I challenge anyone to show that this is the most cost-effective way to help people into work or to tackle our generational failure to provide enough affordable homes for our growing population."
  • Non-pension benefits - Winter Fuel Allowance, free bus travel, free prescriptions and free TV licences for the over 75s - for better-off pensioners should go in 2015: "Does anyone here think it would be responsible for a country in our financial position to go on giving free TV licences to Sir Michael Winner, free eye tests to Lord Sugar and a winter fuel allowance to Sir Paul McCartney after 2015?"
  • On child tax credits: "They do little to help parents get into work and nothing to incentivise them to take steps to improve their capacity to command a decent wage in future." "Does anyone really believe that the best way of helping the next generation escape poverty and build better futures for themselves is to spend £30bn on financial transfers to their parents and only £5bn on education for the under 5s."
  • On Sure Start costing £1.1bn a year: "Many might think that Sure Start would be a good candidate for more money. But I am afraid that would be to perpetuate the kind of lazy sentimentalism that has seen so much taxpayer's money wasted over the last decade."

"If we are going to make any difference to the future productivity of working people and the competitiveness of our economy, we must abandon this soggy approach and demand that the programmes we invest in have a substantial and measurable impact. Otherwise, we should leave the money in the hands of taxpayers, from whence it came," Mr Boles will say.

"Productivity and competitiveness are my lodestars because I am convinced that the only way that we can restore sustained improvement in living standards is if most working people in Britain can command high and steadily increasing wages in the market place.

"It may be true that, for some, total household income has continued to grow because a previously unemployed partner has started work or one or both partners have increased the number of hours they work.

"It may also be true that increased financial transfers by government have helped many people on low pay enjoy rising incomes despite the stagnation in their wages. But it seems obvious to me that neither of these trends is sustainable - and, even if they were, we should not want them to be sustained.

"What will it do for our health and happiness (let alone that of our children) if the only way to achieve a growing income is to work longer hours? And which of us really believes that any government will be able to expand every year the amount of money it gives to those whose wages have stalled?" he goes on.

He will also challenge the Labour leadership to reveal which taxes they would raise to reconcile their public spending pledges with their declared commitment to deficit reduction.

Mr Boles becomes the most senior of modernisers around the prime minister to endorse the scrapping of benefits for the elderly, as well as proposing a delay in bringing in social care.

Work and Pensions Secretary Iain Duncan Smith has said before that universal benefits for the elderly might have to go, but in a recent speech on welfare the prime minister ruled out ending them within this Parliament.

Allegra Stratton Article written by Allegra Stratton Allegra Stratton Political editor, BBC Newsnight

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  • rate this

    Comment number 346.

    There is nothing universal about "universal benefits" that only last for one generation. FACT the average Baby Boomer will get 118% more in benefits and services over the course of their lifetime than they will have paid in taxation. Who picks up the tab? The baby bust generation. Macmillan banging on about his people never having it so good comes to mind.

  • rate this

    Comment number 345.

    When will we rid ourselves of these incompetent pratts, we only encourage them by voting for them!!

  • rate this

    Comment number 344.

    I am a pensioner 0f 72 years of age, I started work at the age of 15 and I am still working part time , but because I receive 2 small occupational pensions which with my state pension uses all my tax allowances, for the last 7 years paid basic rate tax. I think I have made more than my share of of contributions. Maybe Mr Boles and his colleagues should take a pay cut to make their contribtion

  • Comment number 343.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 342.

    After watching Dispatches and Panorama last night, then to read this!!. Working/Middle class people have had there spending power cut by 5% this year. The RICH have had there living standards rise by 25%. The Banking Industry has had £375 Billion in Benefits, and on top of that they pay VERY little TAX. Going for the wrong folk AGAIN.

  • rate this

    Comment number 341.

    the government has to decide who is 'wealthy' - some might class me as well-off , but that is a matter of comparison . people who have paid into a system all their lives should not be penalised . there are other things that could be cut - welfare for e.u. migrants and asylum seekers , foreign aid etc ,etc - the people of this country should be the last resort for wringing money out of.

  • rate this

    Comment number 340.

    In his argument Nick Boles uses extreme examples such as Paul McCartney, Alan Sugar & Michael Winner. One could just as easily make the case that MPs belong in prison using the extreme examples of Ian Aitken, Jeffery Archer & Jim Devine.

    If they had moral guts, this government would stop picking on ‘easy targets’ and concentrate instead on those that caused the problem in the first place.

  • Comment number 339.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 338.

    I think the main problem about this comment from Boles and what most people will want to know is what he defines as WEALTHY? as this could have a very wide defining line, when the likes of these politicians with the salaries, expenses, second homes etc don't seem to see themselves amongst the so called "Wealthy".

  • Comment number 337.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 336.

    @322 bob irving

    Spot on, and this coalition and their supporters have spent the last 2+yrs
    blaming everyone else for the mess they are causing and spouting lies one after the other. Now to top it all Osbourne making false accusations directly at E BALLS. The coalition is so desperate now that they will try anything to salvage some of the mess they are making even vile personal attacks AGAIN

  • rate this

    Comment number 335.

    #330 'what constitutes wealthy. Is it the widow living on a state pension in a £500,000 house left by her husband?'
    If she can't afford it, she must downsize. She is wealthy; just living above her means. If we are to subsidise living in a £500K house, do it for a worker with a family. By definition, her wealth is unearned, inflation derived. Her husband should have taken out insurance.

  • rate this

    Comment number 334.

    Free bus travel should certainly be looked at. How about giving a bus pass to those who don't have a car? In my opinion this would be fairer as it would help those who actually need free travel and also encourage people to consider their transport choices. As for free tv licenses, why should pensioners get to watch for free when first year uni students, living in halls have to pay a full fee each?

  • rate this

    Comment number 333.

    £25 billion a year would be saved by closing all those tax loopholes that businesses + the rich use to avoid paying their fair share

    But whilst the Goverment is quick to take money off the poor + is quick to suggest taking it off pensioners, nothing is being done about making the the rich pay the same amount of tax as the rest of us. They occasionally make a few noises about it, but that's it.

  • rate this

    Comment number 332.

    Very similar to what happened in Germany during the 1930`s. Country in trouble, choose a vulnerable group to blame, build up the rhetoric, deprive group of means of adequate income. Houses vacated. No gas chambers here but maybe a few more deaths from cold and a change in the law to allow assisted suicide. The Fascist today are dressed in suits and black ties.

  • rate this

    Comment number 331.

    Keep free bus passes for all pensioners. The roads would be safer and it could have the benefit of reduced emissions etc.

    Those who feel unable to drive, through either health or ability, would be encouraged to stop. Those who would otherwise be immobilized could enjoy a more active lifestyle. Those who dislike public transport, for whatever reason, needn't to use it but the option's there.

  • rate this

    Comment number 330.

    Setting aside the fact that wealthy pensioners were wealthy earners who contributed a great deal of national insurance in their working lives, this statement is mostly bluster. No free bus passes, so carry on using your car. No free prescriptions, so carry on with your BUPA. Anyway, what constitutes wealthy. Is it the widow living on a state pension in a £500,000 house left by her husband?

  • rate this

    Comment number 329.

    People are getting very angry.
    When this occured in France circa late 18th century the Bastille was stormed and not to put too fine a point on it, heads rolled.
    Perhaps Theresa May should be hiring not firing police officers to contain if possible what may well be the coming storm. MP's really have to pull their fingers out and connect with the people failure to do this is at their peril.

  • rate this

    Comment number 328.

    The British public are fair if it was £40,000+ a year income they would accept it but they know it would be based on savings and most pensioners have savings even ones on a pension of £14,000 a year therefore snatching most pensioners bus passes , you are not so smart Boles.

  • rate this

    Comment number 327.

    @ Chris Reynolds
    9th July 2012 - 21:21
    " I'm sure there are many people who use the Winter Fuel Payments to spend on other things than paying for the high cost of heating during the winter months." - Yes, like food.


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