Labour to review pensioner benefits

Labour will "review" universal pensioner benefits in the lead-up to the next election, deputy leader Harriet Harman said.

Coalition ministers traded blows earlier this week after Work and Pensions Secretary Iain Duncan Smith said he would "encourage" people to forego perks such as free TV licences and winter fuel payments.

Mr Duncan Smith later clarified his comments, saying it was up to pensioners what they do with the money.

But amid calls for "inter-generational fairness", Ms Harman admitted that Labour would look at the policy of universal benefits for pensioners.

She told BBC Radio 4's Today programme: "There's a problem with pensions when you means test. We wanted to tackle pensioner poverty, but things change. You always have to look at everything to make sure that your provision is right for the demography, for the income distribution at the time, there's no mystery about that.
"We stand by why we introduced it (universal pensioner benefits), we will review it coming up to the next election. The thing about universality as opposed to means testing is you want to ensure that there's a sense of the contributory principle - that people, when they pay in, can take out when they need it.

"You want to be able to give extra help to those who are the poorest. What you don't want to do is have a situation where the administration and testing costs more than the actual provision of the benefit."

Ms Harman also admitted Labour would temporarily borrow more if elected to Government.

"Two parts of our five-point plan would involve a reduction in VAT on a temporary basis which would involve a temporary increase in borrowing," she said.

"For part of our programme it would need to be financed by a temporary increase in borrowing for temporary measures. Some of it we have showed how we could pay for it - through for example cutting tax relief on pensions - some of it we've thought would be self-financing, others would require initial borrowing."

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