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20 March 2014

Does Osborne’s Budget herald a raid on pensioner benefits?

The Chancellor may have provided the Tories with the protective cover they need to limit universal pensioner benefits.

By George Eaton

George Osborne’s Budget was aimed squarely at winning over the pensioner voters who have deserted the Conservatives for UKIP and who are so crucial to the party’s chances of victory (they vote more than any other age group). But could yesterday’s giveaway be the prelude to a raid? While the Tories have pledged to maintain the triple-lock on the state pension (so that it rises in line with inflation, earnings, or 2.5%, whichever is highest) throughout the next parliament and have excluded it from the new cap on welfare spending, they have yet to make a similar commitment to protect other benefits for the over-65s. 

In 2010, under pressure from Labour, David Cameron vowed to ring-fence universal pensioner benefits such as Winter Fuel Payments, free bus passes and free TV licences (a promise he has kept), but many Tories (most notably Iain Duncan Smith) have urged him to avoid repeating this pledge. They argue that protecting these perks for all, including the wealthy, is indefensible when the deficit is still so large (at £108bn) and spending on the young and other groups is being cut so hard. 

With both Labour and the Lib Dems now arguing for some degree of means-testing, the path is clear for the Conservatives to revise their stance without fear of reprisal. It is significant that, unlike the state pension, all pensioner benefits have been included in the welfare cap, creating the possibility of them being cut in order to stick to the new limit. Osborne’s Budget may well have been aimed at providing the Tories with the protective cover they need to execute a U-turn. 

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