Balls defends fuel payments policy

Ed Balls has defended his plan to strip winter fuel payments from wealthier pensioners as proof his party would show "iron discipline" in power.

The shadow chancellor insisted the move is "very significant", despite criticism it would only save £100 million a year.%VIRTUAL-SkimlinksPromo%
He also signalled that Labour would take the coalition's 2015-16 spending review as a "starting point" if it won the general election - although capital budgets could be higher.

In a speech in central London, Mr Balls said it would be irresponsible to set out detailed plans so far in advance.

"We must work together to find efficiency savings and switch resources to Labour's priorities," he said. "But you cannot prepare now on any basis other than that you will inherit very tough spending plans from this year's spending review. They will be our starting point."

Universal benefits for pensioners have become a key battleground, with David Cameron under pressure to abandon a pledge to protect them. Some Tories and Lib Dems believe they should be means-tested to protect other services from the £11.5 billion of further cuts being sought by Chancellor George Osborne in this month's spending review.

Under Labour plans, the payments would be stripped from all pensioners with sufficient income to pay higher or top-rate income tax - around 600,000 individuals at present - saving £100 million a year. But Mr Balls indicated that no other universal benefits for pensioners, such as bus passes, were being targeted.

He said: "We will need an iron discipline and a relentless focus on our priorities," he told the audience in Docklands. "When our NHS and social care system is under such pressure, can it really remain a priority to pay the winter fuel allowance - a vital support for middle and low income pensioners - to the richest 5% of pensioners, those with incomes high enough to pay the higher or top rates of tax?"

But Labour's former cabinet minister Peter Hain raised concerns about the proposal, saying: "The attack on pensioners' allowances leaves a big question hovering over the future of the welfare state: is it for everyone, or just for the poor?''

Mr Hain added: "Today's Labour announcement raises the troubling question as to whether the party is being dragooned into accepting Tory/Lib Dem spending plans after the next election. Ed Balls's otherwise brilliant demolition of the catastrophe wreaked by the Tory/Lib Dem scorched earth economics leaves that question unanswered."
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