Adding fuel to the fire on issue of pensioner benefits

IT is hard not to be cynical about the promises made by politicians in these final few weeks before the General Election, but David Cameron’s pledge to protect pensioner benefits such as the winter fuel allowance, free prescriptions and free bus passes is especially easy to see through. Mr Cameron knows older people are more likely to vote and, what is more, they are more likely to vote Conservative, and that makes their benefits politically untouchable.

But, cynical or not, the important question is whether the Prime Minister has done the right thing. For some time now, a coalition has been building against benefits such as the winter fuel allowance being given to better-off pensioners. The Fabian Society recently said pensioners should share the pain of austerity and both Labour and the LibDems support removing the benefits from pensioners who do not need them. And there are doubts too in the Tory party: Iain Duncan Smith, the work and pensions minister, has called the winter fuel payment an anomaly.

The logic of their argument is strong. Pensioners’ living standards have grown faster than any other age group since the 1980s, but they have also been far from the biggest losers in the recent years of austerity. As public services have been cut, wages frozen, and welfare squeezed, it is the young, not the old, who have suffered most. And yet pensioners have been told that their benefits such as the fuel allowance are safe.

The UK Government’s argument in promising to continue to protect those benefits is that pensioners have paid into the system all their lives through taxes and it is only right that, as well as the basic state pension, they can claim benefits now they are old. The winter fuel allowance is also paid not only to well-off older people but many pensioners who rely on it to heat their homes and would have to turn the thermostat off, or switch their heating off altogether, without it.

There is also a practical problem in trying to change the system and target the fuel allowance at the pensioners who actually need it. The first option would be means-testing, but we know that can cost almost as much as it saves and it is also a complicated option in a system that is already complex. Alternatively, the Government could ask wealthier pensioners to pay back the fuel allowance if they do not need it, but how many pensioners are likely to take that up? And is it right that richer pensioners get to choose what happens to the money? Making the payments taxable instead might be a way to ensure they are fairer.

Whatever option is chosen, for the time being, it is right that the benefit should be protected but a thorough assessment must be made of the winter fuel allowance in the next parliament. David Cameron has proved he is unwilling for now to take any of the pensioner benefits away, but the case against allowances to wealthier pensioners is growing. And if the Tories win the election and start delivering on their threat of £12 billion more welfare cuts, benefits for the better-off will be even harder to justify.