David Cameron has ditched more pre-election policies than it is possible to recount. It is easier to list those promises that he is keeping, but it is a very short list. There are some that stick in the memory because he made a great fuss about them. Labour accused him of planning to axe the universal benefits paid to pensioners. Dave denounced these claims repeatedly; “They are already telling the most appalling lies about Conservative policy towards the elderly.” “You know you are getting letters from the Labour Party that say the Conservatives would cut the winter fuel allowance, would cut free bus travel, would cut the free TV licence. These statements by Labour are quite simply lies.” “You will keep the benefits you depend on. Don’t believe Labour’s lies that we will cut them or get rid of them. The winter fuel allowance, pension credit, free bus travel and TV licence for over-75s will all stay.” During the televised leader’s debates Dave angrily demanded that Gordon Brown apologise for these lies and withdraw the letters. No room for any doubt then. However, Dave has been very quiet following the leaks last month that £13billion cuts to the Welfare budget would include benefits for the elderly, even though this might be achieved by deferring the age at which they can be claimed. Similar reporting of leaks have been flatly denied by No. 10, but not this time.
The Coalition Government is asking for trouble if any changes are made to universal benefits without first obtaining a mandate from the electorate. All of the parties could have put forward proposals in their manifestoes to tidy up the benefits and make them easier to administer, with a resulting reduction in bureaucracy and cost. They might now claim that the budget deficit requires them to make cuts, but they knew the scale of the problem before the election as they had been warned by the Bank of England. The government has already switched the calculation of pensions from the Retail Price Index to the lower Consumer Price Index just as the baby-boomers start to draw their state pensions. In general, this post-war generation left school at fifteen or sixteen and have been in continuous employment, paying contributions and taxes. To reduce the value of their pensions and defer the age at which they can claim the other benefits will be a slap in the face for them. This will be an affront too far, resulting in a backlash from a new generation of active pensioners, unlike any previous generation. In seeking to preserve their entitlements the baby-boomers will also be looking to protect the older generations who have been badly treated by earlier governments, both red and blue.
“It is time for this generation to reflect and show its gratitude”, said Prime Minister Cameron on the 65th anniversary this year of VJ Day. It is assumed that he was referring to his own generation [post baby-boom] when he commended our veterans for their bravery, dedication and sacrifice. He was talking specifically about the Far East veterans, saying “They fought and suffered in ferocious conditions. They witnessed incomprehensible horrors. They lost their lives and many were imprisoned. And they did this for us, to protect the freedoms we enjoy today.”
This month we have had a special commemoration of the Battle of Britain which took place 70 years ago and was pivotal in the defence of the mainland. Fulsome tributes have been paid to the ‘few’ but the ‘many’ who supported them have also been recognised. Political leaders once again praise them and acknowledge the debt that the Nation owes them. They also acknowledge that Britain was involved in total war in defence of freedom, which included civilians on the home front as well as the military forces fighting all over the world. The debt that is owed is owed to that whole generation. It is right for the Government and political leaders to continue to acknowledge the debt and remind us that we should show gratitude, but it is about time that there was a practical expression of that gratitude.
The same applies to an earlier but decreasing generation born at the twilight of Victoria’s reign who were embroiled in WW1 and who are also remembered each November. Lauded by successive Prime Ministers but with little practical reward between the Wars, they received support in the 40s with the setting up of the Welfare State and decent pensions, only to have that pension devalued when the Thatcher administration broke the link with earnings. The pensioners that were most affected were the WW1 generation. New Labour did nothing to reverse this travesty in the twilight of their own lives. The few who are still alive should be the first to received enhanced age-related pensions. This process could then be continued down the ages. This can be afforded because although the state pension is operated on a pay-as-you-go basis, there is a substantial surplus that would have to be prised back from the sticky fingers of the Treasury.
We also need to be clear about the nature of the winter fuel payment. New Labour Chancellors have messed about with it and used it as a tool to cover up their mistakes and to compensate those adversely affected. A derisory pension increase led to a revolt which was put down by way of an increase to the fuel payment. Similarly, when the 10p income tax band was increased to the standard rate those in the 60+ age range, who had not been compensated by other measures, received some relief by use of the increased fuel payment. If the fuel payment is now to be denied to those people, they will lose the effect of those reliefs and compensations. It will be nothing more than state robbery. It is an ex gratia payment and should be recognised as such by ditching the ‘winter fuel’ title. In reality it is the 14th monthly pension payment paid in time for Christmas.
Those revolts against New Labour Chancellor Brown will look mild to the revolt faced by Coalition Chancellor Osborne if he withdraws, reduces or postpones the entitlement to the winter payment. It will also make David Cameron’s outrage, at Labour lies, as nothing compared to the outrage of the baby-boomers. They have paid their dues and will then be denied their entitlements. They have done everything that was asked of them by way of making adequate provision for retirement through second pensions. Joined SERPS, took out portable personal pensions, or joined occupational schemes; only to see constant change by government. SERPS abandoned, misselling of private pensions and withdrawal of fund tax breaks. The recession and downturn in the stock market, together with quantative easing, have devalued their pension funds. They have ended up with worthless pensions and must now rely on an inadequate state pension that has been run-down. A recent Aviva report highlighted the plight of some over-55s who have no pension, no savings, but have massive debts. They will be forced to rely on supplementary benefits at the public expense. This is just the tip of the iceberg.