Could looming Budget hammer pensioners?


Vince Cable

With the Budget just around the corner, a story has leaked that Vince Cable is pushing for George Osborne to take the opportunity to hammer pensioners. The Lib Dems were all for means testing benefits that at the moment go to all pensioners. But since David Cameron has decided this would be politically impossible, Cable has come up with another suggestion - taxing them.

So will Osborne go for this, and what is the alternative?

The debate surrounding this Budget has been horribly public, with all sorts of Cabinet Ministers declaring that their department can't take any more cuts. Vince Cable has admitted that he is part of what is being called the National Union of Ministers - calling for protection for their departments.

The latest development, however, has been more private.


A report in the Express has claimed that behind closed doors Vince Cable is arguing for the taxing of pensioner benefits like the winter fuel allowance. He is adamant that it's 'barmy' to keep paying universal pensioner benefits to wealthy people, given the pain that is being inflicted elsewhere.

He says that taxation would be a way to claw back some of the payments. The change would mean that a higher-rate taxpayer under the age of 80 would lose £80 of their £200 payment.

The Daily Mail said that its sources in the Treasury said this would raise relatively little, and would be seen as a breach of Cameron's pledge not to cut universal pensioner benefits.They apparently poured cold water on the suggestion.

What else?

However, if this doesn't come to fruition, it leaves an awful lot of cuts left to find. With every department robustly defending their patch, and Liberal Democrats opposing a range of Conservative suggestions - said to include limiting child benefit payments to two children, and removing housing benefit for young adults - Osborne is running out of options.

Meanwhile, on the flip side, according to The Sun, his own party is calling in the strongest of terms for tax cuts in order to reinvigorate the economy.

The question is what will he do: resist the pressure and plough on with tax rises and more welfare cuts, or change direction and somehow explain-away a radical rethink on anything from tax cuts to pensioner benefits.

What would you do? let us know in the comments.