The Government claims it isn’t thinking about cutting pensioner perks — but it should be

By Peter Hoskin
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Perhaps the most intriguing political story in today’s papers is this one in the Sun. It says that ministers are “drawing up controversial plans” to axe benefits such as the Winter Fuel Allowance, free bus passes and free TV licences for all new pensioners. The idea, apparently, is that the poorest new pensioners will be handed more money via their pension credit. Richer pensioners will get nothing. The paper goes on to say that…

Actually, at this point, I should probably relay what a senior Government adviser told me when I mentioned the Sun’s story to him. “It’s totally untrue,” he said. “We are not working on any changes.” Ah.

But if that’s genuinely the case, then it would be a shame. I have already described why I think there’s a moral and fiscal case for cutting pensioner perks, but, increasingly there’s a political one, too. It comes in two parts:

• The growing consensus around cutting universal benefits. The Sun is just one of the newspapers pushing for benefits such as Winter Fuel Allowance to be withheld from the well-off, and they’re joined by the Lib Dems, a good number of Tory backbenchers and even some Tory ministers. Labour hasn’t signed up to the same cause yet, but there’s an opportunity there if they want to take it. It will be very difficult for one party to argue in favour of pensioner perks for, says, millionaires, at the next election, when everyone else is arguing against it.
• The growing inconsistency of the Tory leadership’s argument. Over the past few weeks, the Tory leadership — including David Cameron — has defended its cuts to Child Benefit by observing that it’s unfair for well-off families to receive it when austerity is biting down on the least well-off too. But, as I’ve pointed out before, this could equally apply to other universal benefits. Mr Cameron is risking inconsistency.

The policy described in the Sun isn’t perfect in every regard. For instance, although any fallout might be diluted by making it apply only to new pensioners, I’m not sure it quite satisfies the promises that David Cameron made ahead of the last election, as the report suggests. And then, as the paper says in its leader column, simple means-testing might be preferable to another expansion of the “credit” system.

But at least that policy’s a start, and would mark an important shift away from a system that still provides hand-outs for the have-lots. The Treasury should think on it.