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?

ADVICE TO LONDON GOVERNMENT AND ITS SUPPORTER

Stop bragging about giving the pensioners a "record £5.30" a week increase. 

Let's get it clear, it was the amount you were obliged to give them, given that it was the "official" inflation rate at the moment which, by law, these things are settled. 

We all know that the "official" inflation rate is unlikely to be the real inflation rate, especially for the poor who spend a disproportionate amount on food and heat. Given that gas increased by about 17% and electricity by 11%, and that food inflation has been running at around 10%, the £5,30 has not even brought the pensioners back to last year's income.  

You could add (because pensioners are) that to pay for the very rich receiving a reduction in tax on the money they earn OVER £150,000 a year, pensioners will no longer get that little extra tax relief that they have had since Mr Churchill introduced it in 1925. 

It's estimated that this will hit 5 million pensioners and cost them up to £250 a year.

While you are thinking about this "record £5,30", you might also like to remember that, with interest rates at their lowest ever level, pensioners get less and less money from their savings. I never hear that mentioned by the government.

Why not also mention that you reduced the winter fuel allowance by £50 and by a massive £100 for the over 80s. That's £1 and £2 a week respectively. Seemingly that has slipped your collective mind. Strange, given the promise Cameron made to keep all these benefits at the same level as he inherited.

You could, of course, brag instead that, because the law says you have to do this, you were also obliged to pay all the "dole  scroungers" and "sickness benefit cheats" (including the 500,000 that Mr Duncan Smith is going to have off that benefit and back to work in the next four years!!), exactly the same percentage increase? But that doesn't tug at the heart strings of the public, does it? And it's difficult to paint people who are sick or unemployed as demons while bragging that you gave them record level increases, isn't it?

And people might get to thinking that the only reason that there are "record" increases is that there is "record" inflation....

I only warn you out of the goodness of my heart because every pensioner I know gets so angry when they hear it trotted out again and again as if there is some sort of beneficence involved. Even Tory voting pensioners are sick of being used. I fear a rash of heart attacks and pensioner deaths if this bragging continues. And you wouldn't want that, would you?

"WHY CAN'T WHINGING BLOODY PENSIONERS JUST STOP BLOODY WHINGING?"

In the wake of the "Granny Tax" fallout, Cameron put Tess of the Horribles into the firing line today, to draw some of the flack away from his beloved Gideon.

It seems from what Tess says, that the Tories have come to the conclusion that what the SNP intends to do in Scotland is the right path for them too, just as they did with the council tax freeze. The trouble is that, yet again, it will involve prices going up and more money going to the Treasury.

Now Gideon the Greasy had already pulled a fast one on the price of alcohol this week, having said that there would be ‘no change’. What he meant was that there would be no change from the Labour policy, which meant that the tax would rise by inflation +. So all the people who thought that no change meant no change in the price, were sadly mistaken. 

Tess announced minimum pricing legislation would be introduced to reduce the mayhem to which many English cities are reduced at weekends and to reduce the cost to the NHS in England (and Wales), after all, in a semi privatised health service it might be their chums who would carry some of that cost. It was surely not an extremely unConservative-like meddling in people's lives and lifestyles. 

Meanwhile, whether or not Cameron liked it, the furore over the "granny tax" continued with someone from the Treasury, called Gauke (must be the minister for making the tea or something) said that it was fair, many pensioners would be better off and they had been largely protected from the coalitions deficit reduction.

Unfortunately for him, or rather for Gideon (as probably no one knows who he is), none other than the highly respected Institute for Fiscal Studies sees it differently. They said that 5 million pensioners would be worse off, losing around £350. They criticised Osborne for trying to dress up "what is clearly a tax increase" as a simplification.

 

I suspect that the pensioners who will be better off are the ones who will benefit from the reduction of 5% from the top rate of tax paid on income over £150,000: maybe Michael Cain or Paul Daniels.

Have pensioners been protected? Gideon was at pains to tell us how much the pension would increase in April, seeming to think that the pensioners might have forgotten that this was a legal obligation based on the rate of inflation. 

The truth is that pensioners have suffered very badly from this, (and the last) government's policies. Private pensions have been ruined by Gordon Brown's raid on pension funds, and have tumbled even further as a result of quantitative easing. Low interest rates have turned savings into a depreciating asset, paying low interest and losing value by the day.

 In England cheap travel has been cut, and now the NHS, which older people need more than most of the rest of us, is to be privatised.

Is this the Treasury’s idea of protection? 

From minute one I said that it was a silly mistake to hit pensioners in the same budget as he gave away billions to the rich. Osborne will live to regret it.

WHAT....NICK CLEGG FOR THE SECOND TIME TODAY?

The deputy prime minister has suggested getting rid of some universal pensioners' benefits and replacing them with means tested equivalents. Interesting ideas maybe, but fraught with difficulties.


One of the benefits he talks about is the over 60s bus pass, a scheme  administered separately in Scotland (with a better and more generous conditions). If things get really tough, it might be something for Mr Swinney to look into.


There are always problems with means testing. 


Firstly you have to rely on people being honest about their income and what they have in the bank. Not everyone does that, and checking it is difficult and expensive. 


Secondly you have to decide a cut-off point. And with a bus pass there can be no sliding scale of entitlement, as there is with some other entitlements. At some point you are entitled to the pass, and 1p a week more and you are not. That has the potential to create a lot of trouble.


And thirdly, there is the cost of staffing the administration of the scheme in every town. It might be done at the same time as Council Tax rebates, but these rebates come stop at a very low level. People well under the poverty line pay full council tax. The limit would have to be set higher. And what about the  people who do not pay council tax.

Be thankful you don't have to heat this: Oh wait, you do.

The advantages of the bus passes, at least in Scotland, are numerous. They give poorer pensioners the opportunity to get out of the house and meet friends or their families, something many of them would not be able to do if they had to pay the exorbitant fares of today's privatised and deregulated buses. 


Getting out of the house is a big boost to older people, many of whom live alone and don't get anything like enough exercise or company. And, as I've said before, it substantially reduces winter heating bills.


I've heard some better off people complain that it is a waste of money to give them these benefits. They don't need them. Unfortunately, that said, a lot of them just accept them.


So, I'm getting behind the SAGA campaign in appealing to people who get a bonus around Christmas to donate it to a charity that will help other people, not so fortunate, to pay their fuel bills this winter. And at the same time I'll appeal to rich pensioners not to use the free bus pass if they can afford the ticket. Every ticket issued costs the government (you and me) money. 


Finally, I'd suggest that we investigate the effects of raising the threshold of  these benefits which currently start at the age of 60, following the increase in the female pension age, and/or issuing them only to those who have actually retired. At the moment there are people going to work every day using their bus pass! If it saves substantial sums, maybe we should do that.

BENEFIT CLAIMANTS MAY HAVE BEEN MALIGNED TO THE POINT OF HATRED, BUT THEY STILL HAVE TO LIVE

I'm at something of a loss to understand why the government is determined to use the Consumer Price Index (CPI), a measure of inflation that excludes housing costs, when determining how much prices for the fabled hard working British family are increasing. After all, along with food and heating, housing is one of the absolute must haves for all of us. However, the fact that it is generally lower than the Retail Price Index (RPI) may point us in the right direction.


And that is particularly important in the month of September, for it is that month's inflation figure that dictates the rise in pensions and in state benefits. And the CPI's 5.2% is decidedly more manageable for the government, than the RPI's 5.6%.


Even using the lower measure, the estimated cost of the increase is £1.2 billion: a large amount given the disastrous state of the British Exchequer.


As Gordon Brown found, when he palmed pensioners off with a 50p a week rise, it's not politic to give a derisory sum to the retired, especially when you've already nabbed between £50 and £100 a year from their meagre incomes to pay back the bankers' bail out. They could be said to have done their bit.

However, no such sympathy is widely felt for the unemployed, who are characterised as being work-shy, and the sick, who are characterised as shirkers hiding behind maladies imaginaires.


And so it is that it has been trailed widely that all benefits apart from retirement pensions, won't, this year, increase at the rate of inflation. 


Mostly people on benefits are the poorest in the country. Yes, there are exceptions,I know, but in reality relatively few, despite what the Sun and the Daily Mail would have us believe. Many are working in low paid jobs and have tax credits, many have been thrown out of work recently by government cuts and can find nothing else. And hard though it may be to believe, many of the people on Incapacity Benefit have  illnesses which lay them horribly low.


For people on these low incomes, whether they be waged or unwaged, times are very hard. The bulk of their income goes on food and heating, clothes and council tax water payments (in Scotland). So with food inflation at around 10% and fuel inflation even higher, their incomes are stretched to breaking point. Edwina Currie may have laughed at the notion that people in the UK were going hungry, but that only shows how completely out of touch she is (if a fling with John Major wasn't enough to indicate that already).


I realise that for civil servants on £20,000 who have not had a pay rise for the last couple of years, and won't for the next couple of years, it may be galling to see benefit claimants pick up a 5% rise. But none of them was too worried when inflation was 1% and they carried off pay rises of 4% and more. The thing is, you either set these benefits by the rate of inflation, or by the rate of wage increases. You can't pick and choose...well, not if you set out to play fair.


I hope that the government will give careful thought to how they proceed with this. You can only push people so far before they start to get really cross, and the current government seems determined to pick fights with everyone at the same time.

I SEE THAT GAS AND ELECTRICITY ARE GOING UP...AGAIN

Here’s a set of random observations:

Last November electricity prices increased by 2% and gas by 9%.

In April retirement pensions increased by 4.6%, and it was announced that pensioners under 80 would lose £50 a year (or 25%) of their winter heating allowance, and those over 80 would lose £100 (or 33%).

It was announced today that in August 2011, 9 months after that last rise, electricity will increase by 10% and gas by 19%.

Pensioners get £102.15 per week to live on; with pension credit they get £137.35.

It is estimated that people on duel tariffs (electric and gas) will face a further rise of £175 a year as a result of today's announced increases.

In Scotland, last December there were snow blizzards and snow lay for around 6 weeks, meaning that some older people couldn’t get out (thus using someone else’s heat).

It has been a cold summer so far, with daytime temperatures around 12 or 13˚C on the east coast. Many pensioners have been forced to have their heating turned on, even in June.

Last year there were around 30,000 cold weather deaths in the UK.
The United Kingdom, which is responsible for these pensions, and for the reductions in benefits (which you may remember Cameron not only promised would not happen under the Tories, but vilified Labour for suggesting that they would. “I don’t often use the word ‘liar’, but today I’m going to because they [Labour] lied”), is currently engaged in two wars costing tens of millions of pounds a day, and has increased its commitment to foreign aid by £12 billion about which they tell us we should feel proud.

Shouldn’t we feel ashamed of the horrific cold-related death toll, especially given that far colder countries do so very very much better?

LIAR: THIS PLUMBS NEW DEPTHS FOR THE TORIES

It was a “watch my lips” moment when the prime minister was asked about winter fuel payments for the elderly.

In the run up to last year’s election he was asked about the benefits given to pensioners; bus passes, winter fuel allowance, free tv licence.

Labour had been putting out leaflets suggesting that these benefits would be cut and David Cameron, saying that he felt very strongly about this said that these Labour leaflets were COMPLETE AND UTTER LIES.

He added that if the (then) prime minister had amoral compass then he should “dig it out”... The Tories would keep the benefits in the way in which he inherited them and it was wrong for Labout to be scaremongering.

He said that he didn’t use the word “lie” very often, but he would on this occasion. Perhaps he shouldn’t have been quite so vociferous, because yesterday pensioners were told that their winter fuel allowance of £400 for over 80s, and £250 for over 65s, would be reduced to £300 and £200 respectively. This despite double inflation rate rises in gas and electricity and who knows how much more before the winter. After all the government seems disinclined to take the steps that the French government took over their power suppliers and insist on inflation only rises.

So now, I don’t use the word liar very often either, but I’m afraid I’m going to use it about Mr Cameron. In the clip linked here, he repeats this over and over again in a way that makes one think that it REALLY matters to him. That was electioneering of the worst sort, because it doesn't.

So he’s a liar and he has no moral compass to dig out at all. His mother won’t be cold this winter though, so that’s alright. The rest of you can freeze.

Iain Duncan Smith has given notice that he will be looking at other benefit like free bus passes and tv licences in an effort to save money. Just when you thought they couldn’t get any lower, along comes Iain Duncan Smith

I know we’re in a mess, but we have enough money to go to war in Libya, so why don’t we have enough money for at least our poorer pensioners.

This is an inexcusable and despicable attack on some of the poorest and most vulnerable people in the country. It would have been a low thing to do in any case, but after that denial, which I have would say was repeated over and over again in interviews... it’s plumbed new depths.

Pics:(1) Fortunately not every pensioner is cold and uncomfortable all winter. (2) This man is visiting an old lady who most certainly won’t be cold. (3) Clearly this lady is not so fortunate; and will be even less fortunate this winter. Sickeningly over 20,000 old people die from cold related illness every winter.

VAT RISE IS PERMANENT: 50% INCOME TAX RATE TEMPORARY

Mr Osborne, back from his estimated £11,000 (over twice the annual retirement pension) holiday in millionaire playboy ski resort Klosters has said that he considers the VAT rise to 20% to be permanent, and has indicated that he would rather reduce income tax rates than reduce VAT, and that the 50% rate Income Tax is a temporary measure. OK, that throws up a couple of points.

Last night I saw some Liberal Democrat blokey in Oldham and Saddleworth pointing out that the VAT rise was an unfortunate but necessary step taken reluctantly by the coalition, totally unforeseen by either party, prior to the election (which would explain why they both said they had no intention of raising VAT).

It was, said this blokey (whose name I didn’t get), on the BBC tea time news, all down to Labour leaving the country in such a terrible mess.

When pressed on the fact that the Liberals had said that they would not raise VAT, he said that they wouldn’t have done if they had been living in some parallel universe where the country’s finances weren’t in such a mess, but they hadn’t known about that before they won power. This begs the question, why was Vince Cable going on and on about the parlous state of the finances, indeed the only person to do that, if the Liberals didn’t think they were that bad?

Ideologically the Tories prefer a sales tax to a tax on income. Mrs Thatcher took VAT from 8% - 15% and reduced income tax in her first year in office. Mr Major put a further 2.5% on in 1991. In 1994 the Tories put an 8% VAT on domestic heating, which was reduced by Labour in 1997.

Before this election Mr Osborne said that his party had no intention of raising VAT, yet within a few weeks of taking up office he had announced his intention of making the standard rate 20% in order to pay down the deficit left by Labour. And now, on the first day of its operation, it has become a permanent feature.

Is this Osborne’s way of getting back the tax breaks for the criminally low paid under £10,000 a year, whom the Liberals have pushed them to exclude from tax over the next five years?

So to all the ordinary people who voted Conservative (or Liberal) you should be aware that unless you earn over £150,000 a year, you will be subsidising the rich with your increased VAT payment.

(As an afterthought, it is also a matter of not inconsiderable shame that it is likely that in a single week just before Christmas, while Mr Osborne was preparing to leave on that holiday, it is estimated that over 2,500 people in England and Wales died as a direct result of the cold. I have no comparable figures for Scotland, but last winter 2,900 people died of the cold.)

I hope you enjoyed Klosters Mr Osborne.

CRUMB OF COMFORT FOR PENSIONERS

Good news for pensioners is that the pension will rise to over £100 a week in April next year.

Given that inflation is well above the target rate set by the government, it is reckoned that the pension will rise by £4.49 per week to £102.14, still the lowest in the EU by percentage of the average salary at around 30%.

This will be a crumb of comfort to pensioners faced with some of the most miserable weather in the EU, with the numbers in fuel poverty doubling in the last 5 years. Add to that that energy prices are not restrained in any way, and that it is rumoured that emergency cold weather payments are set to be cut from £25 to £8.50, and we are looking at misery for old folk who have little more than their pension to live on in a winter that is predicted to be very severe.

Of course those who were prudent and saved something for their old age are being rewarded with almost zero return on their money, with interest rates at record low, and inflation far above anything that any savings account pays.

Let’s home that if Mr Osborne is going to reduce the amount paid as a winter fuel bonus to pensioners, that he does it only for the very richest pensioners for whom the extra £250 is of negligible interest.

According to the Telegraph, this will be the last time state pension payments will be based on RPI. The government, they say, is to switch to Consumer Prices Index (CPI) inflation starting next year. This may mean lower increases in payments from April 2012 onwards. For instance, last month while RPI was 4.6%, CPI was 3.1%.

I’m confused. I thought that that was only for other benefits. I thought too that the retirement pension was to be linked (as it always should have been) to wage increases. Of course at the moment that would probably mean what Mr Brown would call an increase of -4%.

Perhaps someone can enlighten me...?