Pensioners "should lose free TV licences and winter fuel"


Alan Milburn

Alan Milburn, a former health secretary and now an adviser to the coalition, has said that wealthy people ought to lose their automatic right to universal pensioner benefits such as free TV licences and the winter fuel allowance. He was arguing that well-off pensioners should face their share of the pain of austerity, so that cash could be freed up to help the young.

So will it happen?

The report

The recommendations came as part of a broader report on social mobility, which highlighted that child poverty was not a problem of the workless, but that two thirds of poor children now come from low income working families - who are worse off than their parents.

He argued that there ought to be more help for those on Universal Credit, a higher minimum wage, and increased learning and earning opportunities for young people.

His suggestion for scrapping universal pensioner benefits for well-off retirees was one way he said that these proposals could be funded.

The reaction

There has already been plenty of work from the coalition to distance themselves from the recommendation. Nick Clegg responded in the Telegraph by saying that punishing the elderly would not help the younger generations.

Meanwhile the BBC reported a spokesperson for David Cameron saying: "The prime minister believes it is right to make commitments to pensioners in relationship to state provision".

The coalition has pledged that the universal pensioner benefits will stay in pace until the next election, and no-one is expecting any movement on this.

The future

However, what happens after the election is another question entirely. There have been a number of statements, as recently as the summer, which would indicate that senior members of the coalition are laying the groundwork for a change to these benefits.

In June George Osborne said that after the election: "Of course we have got to look at how we can afford them." A month before that Iain Duncan Smith seemed to argue that benefits for pensioners had been protected for the life of the parliament, because "pensioners need a much longer time if you are going to make changes to their income." He had already urged well-off pensioners to 'hand back' their winter fuel allowance

Nick Clegg has made it clear on his radio show that: "I think it is right to say that millionaire pensioners, for instance, don't need winter fuel payments and free TV licences, because they can afford them perfectly well themselves."

Meanwhile Shadow Chancellor Ed Balls has said that Labour would end winter fuel payments for better off pensioners.

What would it mean?

Clearly the tide is turning - albeit slowly. Unfortunately until the move gets closer we will not know what it means for most people. The definition of a well-off pensioner could be up for debate.

The politicians know they can refer to millionaires and garner support, but the question of where they draw the line is a thorny one. They might opt for a high bar like higher-rate taxpayers. They could opt for a far lower one - like the threshold for pension credits.

They could even set a very low and completely arbitrary one. This week in the debate over means testing for care for the elderly, care minister Norman Lamb described people with savings of £23,000 as 'quite wealthy' as he proposed that this should be the point at which people are made to spend their savings on care rather than being able to defer paying until after their death.

What's to stop them arguing that these 'quite wealthy' pensioners don't need universal benefits either?

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