If the words of the Chancellor George Osborne are to be believed then the Tories WILL be cutting pensioner benefits after the next election. There is no doubt about this whatsoever.
1. What has Osborne said?
Osborne alarmed Duncan Smith and angered Clegg when he said on Monday that £25bn in spending reductions, due to be imposed between 2016-17 and 2017-18, would have to include £12bn in welfare cuts.
The Guardian reported on this here and stated in this article that Clegg called this a monumental mistake, which it is as pensioner cuts are electoral suicide for any political party.
Conservative sources said Osborne’s intervention – a proposal that also promptedNick Clegg to publicly warn that the chancellor is in danger of making a “monumental mistake” – had highlighted stark differences of approach between the chancellor and Duncan Smith over how to reform Britain’s social security system. Osborne demanded that roughly half of future spending cuts in the next parliament come from the welfare budget.
2. What is the welfare budget broken down by pensioner and working-age spend?
We have a definitive answer on this from IDS as Hansard records and this is the total welfare spend is £170 billion with 68% or £116 billion going to the pensioner and 32% or £54 billion to working-age:
So we see the figures – those pesky things called FACT – that the Tories require £12 billion of welfare benefit cuts as a matter of stated policy and the Tories are at pains to say they will not cut pensioner benefits. So this £12 billion must have to come from the £54 billion paid to those of working-age.
3. Is it possible to cut welfare benefits to working-age claimants by 22.22%?
Reducing the working-age benefit bill from £54 billion to £42 billion is what the Tories would have to do – a cut of 22.22% – and this cannot be achieved.
The Tories will HAVE to cut pensioner benefits
That is the only conclusion that follows from this stated policy aim of reducing the welfare benefit bill by £12 billion per year. In terms of money and in terms of fact there is no contention there at all yet the Tories are at pains to say this will not happen.
The fact the Tories WILL HAVE TO CUT PENSIONER BENEFITS is a given in order to achieve the £12 billion per year saving sought by the Chancellor.
What have the Tories said?
No we wont be taking away the free TV licences (£606m cut) from pensioners they say or the Winter Fuel Allowance (£2.14 billion)
TV licence cost as DWP official figures reveals
Winter Fuel Payment cost
Then a few days ago we had the Daily Telegraph ‘intimating’ (ahem!!) with very detailed figures in what they now say was merely an ‘intellectual exercise’ that £400 million a year could be saved from applying the bedroom tax to ALL 515,000 under occupying pensioners in social housing as I reported here and 99.999%+ agreed with. This saw abject pomposity of the Telegraph journalist accusing me of (a) misleading and (b) frightening the pensioner! I refer back to the figures above as strong support for my view that the pensioners will HAVE to see their benefits cut to achieve the £12 billion cuts per year that HM Treasury is imposing on the DWP and also ask who raised the bedroom tax pensioner imposition?
An interesting aside is the only other ‘naysayer’ to my opinion was Inside Housing which is revealing as to the political leanings of Inside Housing but this is a far bigger issue than a spat between myself and Carl Brown.
That leads into the Tories claims on the biggest welfare spend area outside of the state pension and where they have to date aimed to reduce the welfare benefit bill – Housing Benefit.
The Housing Benefit Bill (again DWP figures)
As you can see despite (a) the bedroom tax, and (b) the overall benefit cap; and (c) the LHA cap; and (d) the SAR cap, which are the four principal ‘welfare reform(sic)’ policies aimed directly at reducing the Housing Benefit bill those policies have failed as the HB cost has increased. A more detailed consideration of this which proves that the HB cost has increased in real terms and has not saved a penny can be found here.
Yet the Tories still tinker with HB with perverse and yet more ill-conceived plans to ‘save’ by taking away the entitlement of those aged under 21 to its receipt that will achieve a negligible apparent saving that will then see the overall bill rise 5 fold by eviction and temporary homeless HB costs for them! Note well too that this policy provides a perverse incentive to get pregnant as those under 21 with children will still be able to receive HB!
No doubt the Tories will continue to then claim savings will come from Universal Credit and note Cameron said the above plan will be paid for by £20m of the savings from Universal Credit here. However Universal Credit will cost at least £20 billion per year more as I detailed here and because UC is a system of a single assessment that means everyone gets not a penny more and not a penny LESS than entitled to. The same DWP admitting in 2011 that almost £20 billion a year goes unclaimed in HB, Tax Credits and Pension Credits that will have to be paid under UC.
In order to achieve the £12 billion of stated cuts to the overall welfare benefit bill the Tories will have to make £32 billion of cuts – the stated £12 billion plus the additional minimum cost of £20 billion per year in Universal Credit.
Anyone care to tell me how the Tories will find at least £32 billion of cuts from the £54 billion working-age welfare benefit bill – a mere 60% cut to the current bill?
The Tories will have no alternative but to cut back on pensioner benefits. They will have to cut them.
Many wish to label me as some leftish scaremongerer and they are free to do so however much of a deflection and ostrich syndrome that is.
What the above reveals in factual terms is that if Labour come into power in ten weeks time they will still have the same economic problems if they continue with the Universal Credit programme.
This is about economic competence not about my political leanings and for the record I am not a Labour supporter nor will I vote for them.
Labour has said it will get rid of the bedroom tax but not said anything at all about the benefit cap, LHA and SAR caps which also cost more than they cut. Labour is wary of but still wedded to Universal Credit despite the fact it will add at least £20 billion per year to the overall welfare benefit bill as everyone will get not a penny LESS than they are entitled to.
In political terms, the Labour Party is petrified of making a bigger issue out of the bedroom tax and other welfare reforms (sic) in fear of being labelled the party OF welfare waste as the Tories have played that card incredibly cleverly through their superficial savings claims from these reforms (sic – as to reform means to improve) and the constant berating of the welfare benefit recipient as the scrounger and shirker.
I am just naive in the hope that policy should be evidence-led that when considered proves the ‘austerity agenda’ is just an euphemism for superficial cuts that cost more. It is very difficult to explain to Joe Public that cuts and caps means the bill increases and they are forced to pay increased amounts in taxation whether directly through income tax or indirectly through VAT and hundreds of other ways to pay for this economic incompetence of ‘welfare reform.’
And because Joe Public doesn’t have or won’t take the time to look at what the figures and FACT actually prove the politicians get away with destructive and ill-considered policies that are back of a fag packet and cost the individual voter, individual taxpayer and the country at large more.
Yet because of that apathy and ignorance and political game playing, the pensioner IS going to get hit with cut upon cut in benefits and no party can deny that, least of all the truly incompetent Tories who developed these policies in the first place.
The ONLY way to ensure the pensioner does not get clobbered with benefit cuts is to abolish Universal Credit and abolish the other welfare reform (sic) policies of bedroom tax, benefit cap and LHA and SAR cap. The welfare reform experiment has failed and will fail spectacularly if the policies continue. They are ill-considered and conceived out of political spin and rhetoric and the purported impact assessments undertaken by DWP ahead of the implementation all state that the government do NOT know what impact they will have and will be monitored on an ongoing basis.
This comprised in the bedroom tax a report 18 months in which covered the first 6 months of the policy and that is not acceptable in any shape or form whatsoever. There is plenty of factual data available to this mere amateur blogger to demonstrate beyond any reasonable doubt that these policies cost and cost and cost and simply do not work. The government has far more data obviously yet that cannot overturn the headline data which shows the bedroom tax, benefit cap, LHA and SAR cap have all failed to reduce the welfare benefit bill and that Universal Credit will fail and fails even in theory given the 100% take-up of benefits and tax credits it holds.
No political party is brave enough to run these arguments as they will be labelled the party OF welfare and that is politically unacceptable to run such arguments. The consequence of that is the pensioner facing stringent cuts to their benefit and standard of living.