"Labour will cut winter fuel cash for better-off pensioners"

[dutchman]

More than 600,000 better-off pensioners will lose their winter fuel payments under a Labour government, Ed Balls will announce today.



The Shadow Chancellor will admit for the first time that his party would have to continue cutting Whitehall budgets after 2015.

The concession launches a week of announcements in which the Opposition will seek to show voters that it can be trusted with the economy again.

In a speech at the City headquarters of news agency Reuters, Mr Balls will say the next Labour government would need to show 'iron discipline' and a 'relentless focus'.

His revelation that Labour would take away cold weather payments is a rare declaration of a policy which would follow an election victory.

The benefit is worth between £200 and £300 a year for richer OAPs who pay higher and top rate income tax – about one in 20.

The plans would only raise about £105million a year, less than half of 1 per cent of the welfare budget.

But the move will put David Cameron in an awkward position since the Prime Minister has promised not to cut pensioner benefits.

Polls show the public wants to see wealthy pensioners lose their perks while the Liberal Democrats have repeatedly called for winter fuel allowance to be cut or taxed. Mr Balls will say that richer pensioners should shoulder their share of the cuts.

'When our NHS and social care system is under such pressure, can it really remain a priority to pay the winter fuel allowance to the richest 5 per cent of pensioners?' he will add.

'Labour believes the allowance provides vital support for pensioners on middle and low incomes to combat fuel poverty. That's why we introduced it in the first place.

'But, at a time when the public services that pensioners and others rely on are under strain, it can no longer be a priority to continue paying the allowance to the wealthiest pensioners.'

The declaration will come in the most significant speech for two years by Mr Balls.

He will warn that if his party wins the 2015 election, it will have to be 'a very different kind of Labour government to those which have gone before'.

Accusing Chancellor George Osborne of 'economic failure', he will say that Labour has to prepare for straitened times.

He will say: 'This is the hard reality. The last Labour government was able to plan its 1997 manifesto on the basis of rising spending in the first years after the election.

'The next Labour government will have to plan on the basis of falling spending. Ed Miliband and I know that, and my Shadow Cabinet colleagues know that too.

'Labour must start planning now for what will be a very tough inheritance in 2015. It will require us to govern in a very different way with much less money around.

'We will need an iron discipline and a relentless focus on our priorities.' Mr Balls will pledge to 'set out a clear and balanced plan to support growth, alongside a clear timetable to get the deficit down' before the election.

The Shadow Chancellor will also back calls by the International Monetary Fund for the Coalition to 'act to boost capital spending over the next two years'.

This would be 'financed by a temporary rise in borrowing as Labour has also urged – to build our way to a stronger recovery'.

Last month Labour's deputy leader Harriet Harman said party chiefs will 'review' whether to cut pensioner benefits such as free bus passes and TV licences.

But that admission sparked confusion after a week of U-turns over whether universal benefits were under threat. Labour leader Ed Miliband had said he would 'look at' pensioner benefits before aides raced to say that he supports universal handouts.

[rebbonk]

Trust Balls (or any other politician) at your peril.

What they say they will do and what they actually do are rarely related.

[dutchman]

[dutchman]

City MPs are divided over Labour's controversial welfare cuts

Coventry Labour MP Jim Cunningham fears his party leadership’s plans to cut benefits for pensioners could be the start of more to come.

In contrast, fellow city Labour MP Geoffrey Robinson welcome this week’s controversial proposal by shadow chancellor Ed Balls to end one universal benefit to pensioners – if Labour returns to power.

Mr Robinson went further in advocating the party could examine ending more universal benefits to help tackle the deficit.

Mr Balls’ announcement of Labour’s intent to end winter fuel allowances for rich pensioners risked party division by signalling an end to the principal of universal benefits – paid regardless of people’s income.

The announcement was seen as signalling a “tough on benefits” future policy direction for Labour.

Mr Balls said if Labour wins the election in 2015, difficult decisions would be needed on welfare cuts to reduce the national deficit.

But Mr Cunningham (Coventry South) said he was concerned about the winter fuel payments proposal, and would not want to see similar cuts proposals for other universal benefits for pensioners, such as bus passes and NHS benefits. He added: “I was pleased to hear the Labour party making clear statements of its direction in a future government.

“I am concerned, however, about the proposed departure from our universal approach to the winter fuel payments.

“I appreciate that the current economic climate necessitates tough decisions, and so understand the shadow chancellor’s thinking.

“As far as I am concerned as long as those who really need the winter fuel payments are not affected and only the rich will lose out, then I am not opposed to the policy in principle – although I would of course prefer to maintain universal benefits as much as possible.”

Mr Balls’ plan for winter fuel payments would hit 600,000 people over 61 who pay higher and top income tax rates, saving about £100million.

Mr Robinson, MP for Coventry North west, said: “Universal benefits help to cement society and everybody gets something.

“But in crisis, or when coming out of a crisis, we can’t have no-go areas.

“In principle, if the recovery continues to stall, we could look at changing more universal benefits, although changes to other universal benefits would be more difficult to administer.”