FIRST IT WAS THE UNEMPLOYED AND THE SICK: NOW THEY ARE OUT TO GET OLD PEOPLE

I'm obliged to "Arbroath" for pointing me in the direction of this story in the Indy about pensioners' benefits.


I felt it was worth a comment because it's actually quite a complicated issue.


Before the last UK election Mr Cameron was forced to make a statement by, if I remember rightly, a Sky journalist who asked him if it was true (as suggested by labour) that he would cut benefits to pensioners. In super election mode Cameron said that he rarely called any one a liar but that Labour were liars. It was something he felt VERY strongly about. He would keep benefits exactly the way he inherited them.

Which kind of boxed him into a corner, and one which I suspect his party wasn't terribly happy about.


It is debatable if Cameron has kept his promise. Winter fuel payments have been reduced from what they were, but the Tory/Liberal argument is that Labour had put them up temporarily and they were due to reduce in any case. (It strikes me too, that there has been some reduction in the amount allowed for subsidised bus fares in England, but I can't be sure about that.)


However, a close friend of the prime minister and party moderniser Nick Boles has recommended that benefits like prescription charges (England only)  bus passes (free in Scotland, subsided in England) free tv licence for the over 75s, and winter fuel payments (universal across the islands) should be available to only the poorer pensioners.


This of course doesn't seem unreasonable, depending whether or not you agree with universal benefits or not.

I'm undecided. I can see the advantages of means testing, and if the money saved on the rich were to be ploughed back into the poor, then that would make some sense. Of course, it will not be. This is Britain.


The thing that made me feel a little disquieted was this paragraph from the Indy's story:


"The Chancellor, George Osborne, the Work and Pensions Secretary, Iain Duncan Smith, and the Deputy Prime Minister, Nick Clegg, are prepared to bring in changes before 2015, arguing that old people should play their part in clearing the deficit."


What? It seems to me that it must have escaped the notice of these very rich men that pensioners are very definitely already playing their part in the deficit reduction plan (although as the deficit keeps rising I wonder that it can any longer be called that). 

Firstly many relatively poor pensioners have some savings, upon which they are now receiving insultingly small rates of interest, far far lower than the rate of inflation. So they see their hard saved money losing value by the day. Yet they dare not spend it because they have no way to replace it, and getting old without a small amount to fall back on is a frightening prospect. Keeping the interest rates low may have helped people with mortgages; it has hurt the nation's savers.


The half baked, useless and incredibly expensive quantitative easing programme in which hundreds of billions of pounds have been poured into the banks, has, it seems to me, done nothing to improve the situation for anyone other than fat cat bankers. What it has done is take billions out of pensions. The bankers cheating on Libor Rates has also cost pension funds dearly. In short people negotiating a pension deal at the moment are in for a sad shock, as the future they might have planned based on pension estimate of 3 years ago, will now be but a dream. 


As Osborne, Clegg and Duncan-Smith will never have to worry about the odd million, they may not have bothered to noticed this.

Means testing can be a useful tool in getting money to where it is most wanted, but it also has disadvantages. 


Firstly it is expensive. Everyone's income, from all sources, and family circumstantial must be verified and staff all over the country would initially have a massive job to do this. But, of course, there will be hundreds of thousands of changes of circumstances every week as people die, have dependants move in and out, spend some of their savings, get extra money from wills (or whatever), have pension changes...and so on There is a huge potential for error, and of course for cheating (yes, some old people cheat).


The second problem is that some things can be means tested on a sliding scale.  A winter fuel allowance for example could be paid in full to someone with £7,000 or less income, and not paid at all to someone on £10,000 or more. In between a sliding proportion of the allowance could be paid. This is a fair way to work.


But you can't do that with a bus pass, so you will have an inevitable cut off point at which people, had they eared but 1p less a month would have been entitled to whatever the deal is in their respective countries. However, as their income stands, they get nothing! Very unfair.

Interestingly, I have yet to hear about MPs taking about reducing the incredibly generous pension they receive; ministers no longer being allowed a redundancy package when they are sacked or forced to resign, given that they already have a well paid job of MP...or expenses as a lord;  nor indeed any reduction in the once-again incredibly generous allowances given to elected and non elected members; or the subsidised meals and drinks in their bars.


Why is that? Should they not be taking part in helping to reduce the deficit?