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8 January 2014

PMQs review: Cameron hints at protecting all pensioner benefits

The PM's warning that means-testing pensioner benefits would raise only "a very small amount of money" was the most notable moment in a sombre session.

By George Eaton

After the sad news of the death of Labour MP Paul Goggins, the first PMQs of the year was a sombre affair, with both Ed Miliband and David Cameron making fine tributes. For the first time in recent months, Miliband split his questions, starting with three on the floods followed later by three on fixed-odds betting terminals (FOBTs). This allowed him to shift into a more offensive gear, criticising Cameron for his inaction over the terminals, without it jarring too much after the tributes to Goggins.

FOBTs (dubbed the ‘crack cocaine of gambling’) are tricky territory for Cameron, with a significant number of Tory MPs and the Daily Mail wanting to seem them more tightly regulated. In response to Miliband, who has called for local authorities to be given the power to reduce the number of betting terminals in their area, Cameron announced that the government’s review into them will report in the spring and said that he was making “a reasonable point”. Based on that, it seems likely that Cameron will bring forward legislation in the near future. He emphasised that if he and Miliband “work together” they can “sort it out” and that “there may well be more to do”. With the Lib Dems having long campaigned inside the coalition for action on the terminals, a cross-party consensus is within sight.

But the most significant moment of the session was undoubtedly Cameron’s response to a question on pensioner benefits. After the DUP’s Nigel Dodds welcomed his pledge to maintain the triple lock on the state pension and asked him whether he would similarly promise to preserve the winter fuel allowance as a universal benefit, Cameron replied “we will set out out plans in our manifesto”. But, significantly, he added that means-testing the allowance, for instance by withdrawing it from those who pay the 40p tax rate, would save only “a very small amount of money”. That is Cameron’s first public hint that he is likely to repeat his 2010 pledge to ring-fence pensioner benefits. Since the winter fuel allowance is the most expensive of the main pensioner benefits (costing £2.2bn last year) it seems equally likely that free bus passes (£1bn) and free TV licences (£600m) will similarly be protected.

It is rather disingenuous of Cameron to protest that means-testing the benefits would raise little money when one could say the same of measures such as the benefit cap (which is forecast to raise £110m) and the bedroom tax (£490m – and both, as analysts have warned, may end up costing more than they save by increasing homelessness and other social ills). But the view among the Tories is that, having lost many pensioner voters to UKIP since 2010, they can’t afford to hand Nigel Farage another attack line.

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