Update on Pensioner Benefit Changes

 Since Rachel Reeves axed the winter fuel payment in July, there has been much angst amongst pensioners not entitled to Pension Credit over her plans to remove other essential benefits, such as free prescriptions and the concessionary bus pass. This would apply to the same cohort (i.e ca 10 million of the 11 million over the current state pension age of 66), and would include up to 2 million of the poorest in our society, many of whom live alone and have no relatives to provide assistance. The government failed to  carry out a full review of the potential consequences of withdrawing universal winter fuel payments  before announcing the change in July, and have still not done so. A legal challenge has been instituted in the courts. In  the meantime, Age Concern have carried out their own review and confirmed that at least 2.5 million pensioners at or below the officially recognised poverty line and a further 0.4 million just above it, will be adversely affected. If the same criteria are applied to the withdrawal of other benefits, at least as many will be disdavantaged, if not more. The single person discount on the council tax is also at risk, and although not restricted to pensioners, would also hit many single pensioners on low incomes hard. 

Both Reeves and Starmer are unapologetically obdurate about reassuring their worried pensioners that they won’t lose anything else, and have steadfastly refused to release any further info. before the budget. The usual excuse for this of not wanting to influence the financial markets prematurely cannot apply here, since any effect on the benefits budget would be very small in comparison with the total public sector spend, and wouldn't require any additional uncosted borrowing. It is reasonable therefore to conclude that the move is vindictive.

There was a brief report in the local press earlier this month, and a more recent article in one of the national dailies, that ‘a labour spokesman’ had said that they had no plans to means test the free bus pass. Although it is tempting to accept this as ‘gospel’, and heave a huge sigh of relief,  I would advocate taking statements such as this with a very large pinch of salt, for the following reasons:

1.      The decision still lies entirely in the hands of Starmer and Reeves – as discussed, both of these politicians have already shown a marked disregard for the interests of their senior citizens, and clearly see them as a millstone round the neck of the economy, and would like to see their number significantly reduced to save on pension costs. There is also an element of punishment in the mix - pensioners were traditionally regarded as Tory supporters before the election, although many of them clearly voted elsewhere this time round. Starmer’s recent attack on the long-term sick and his obsession with strengthening workers rights would also tend to confirm a wider view of the burdensome nature of  the 'less productive' elements of our society within the leadership. This is both unjust and distinctly 'unsocialist' and is already driving a wedge between him and his party faithful. He should remember that many of those on long term sickness benefits are there because of  the lack of adequate NHS provision, due to a system which Labour themselves are quick to point out is ‘broken’. They would happily return to work if they were able, and had the necessary support. Starmer himself is now 62 i.e only 4 years away from his own state pension eligibility, and has already been accused of being a 'traitor to his age group' on social media. He will of course never be short of cash himself, given his entitlement to a £215k annual pension as a former PM (he would get this even if he resigned tomorrow, as some in his own party would like). Recent allegations of sleaze around donations from Lord Alli have certainly not improved matters for him, and his poll ratings have plummeted, which speaks volumes. I doubt whether his recent grandstanding at Conference and subsequent bouts of jetting round the world at taxpayers expense attempting to dictate foreign policy to all and sundry will restore this, since he has already lost the confidence of a large chunk of his electorate. The really worrying thing is that when openly challenged in media interviews on his falling popularity, and the reasons for it,  he openly admits he "doesn't care". I'll leave the reader to decide whether this matters, given his unassailable majority in Parliament, and the damage an overtly autocratic politician with that kind of attitude could do with it.

2.      We have no info. on the seniority (or otherwise) of the Labour 'spokesman' involved – we do know that many of the rank and file of the party are vehemently opposed to cutting pensioner benefits, including at least one of the more powerful unions, and this particular spokesman could just be indulging in wishful thinking as a more left-leaning member of the party. I notice that Unite's motion to restore the winter fuel payment was cleverly relegated to the end of the Labour Party conference by the leadership in an obvious attempt sideline and defeat it, but in the end was still passed with a significant majority.  Sadly , the resolution was non-binding, but the issue is certainly not going away, and dissent will continue to rumble on. The fact that the Unite motion did actually pass easily puts the leadership firmly at odds with the party membership - this is not a good position to be in only a few weeks into a 5-year term. Starmer has always been at risk of a Momentum coup at some point, given that he has built up many implacable enemies on the left of the party in the last 5 years, and more importantly, failed to purge the candidates list of left wingers in June. If Reeves does remove any, or all, of the remaining pensioner benefits at Starmer's direction (see previous blog for a detailed list and analysis of the consequences), we can expect an explosion of internal conflict within the party, and even earlier than originally predicted. 

It is, of course, possible that the ministerial teams responsible for administering these additional pensioner benefits have in fact already reviewed the logistics of cutting them and concluded that the cost, and the consequences, of doing so would outweigh any financial savings. Removing any more of these benefits at this stage would confirm Starmer's inbuilt vindictiveness against pensioners, and thus create a powerful backlash amongst the electorate as a whole, which I suspect would be much more intense than for the Winter Fuel announcement. Moreover, the bus pass and the single person council tax reduction are both administered by Local Authorities, many of whom are labour-controlled, and are therefore likely to fear retribution at the ballot box next May if they are seen to be cooperating with any such government edict. 

Removing free prescriptions for the over 60s would doubtless also cause an outcry amongst NHS managers and staff, who are still smarting after their new minister in charge, Wes Streeting, mortally insulted their effectiveness as workers by announcing their own institution as 'broken'. One can certainly sympathise, given their heroic efforts to prop up their crumbling edifice over the last 20 years in the face of funding cuts, and their sacrifices for us all during the pandemic. NHS staff would also quite rightly fear the medical consequences of a wave of patients stopping their own medication and overwhelming A&E departments as a result of their inability to pay £9.50 for each and every prescription they need. Starmer could thus expect a stand-up fight with both his Local Government and NHS staff over the issue if he were to risk imposing cuts.

One further caveat to be aware of here - many pundits seem to be assuming that 'all will be revealed’ in the Autumn Statement in October. Somehow, given the record of this government, I doubt this will be the case. Those who heave a sigh of relief, if and when Reeves doesn't cut their benefits in October, may still get a rude awakening during the course of next year. Given the furore over Winter Fuel, it would make sense for the leadership to attempt to 'slip through' any further contentious changes after things have quietened down, and they perceive that the electorate is 'looking the other way'. There will no doubt be plenty of opportunities for such subterfuge, given the turbulent state of our world at present.

Make no  mistake, though, we will all be watching like hawks from now on. 

Given their record, would you trust this government to 'come clean' on anything they’re planning in advance?

The #10 CEO and ‘Ringmaster’, Sue Grey would certainly not tolerate that sort of strategic error, now, would she? If you thought Cummings was the epitome of an all-powerful executive who 'rules the roost', think again....this lady takes the biscuit.

Update 6.10.24: I spoke too soon...Iron Lady 2 is no more - wonder what she fell out with Starmer over....Come back Dominic - all is forgiven...

Update 28.9.24: Retribution for Reeves' Winter Fuel debacle has stepped up a gear with the opening of proceedings against both UK and Scottish Governments by a group of pensioners in Lanarkshire. While the Judicial Review - on the legality of means-testing the payment - is only in its early stages, and is unlikely to produce a verdict soon, it may well give Starmer and Reeves pause for thought - the current 'bull in a china shop' approach they seem to be taking isn't helping anyone - let alone their party. There are other, and arguably a lot less contentious, ways of saving £2Bn (actually more like £1Bn when you take into account the expected extra Pension Credit claimants the DWP's campaign will have generated). The flurry of interest in adjusting fiscal borrowing rules in order to produce more headroom for the budget in recent days is no coincidence, and may signify a re-think. There is certainly precedent, since so-called 'Golden Rule' (i.e. no borrowing to fund everyday expenditure) was introduced by Gordon Brown in 1997 and then abandoned after 2009 throughout the 'Austerity 1.0' era until Sunak brought it back belatedly in 2021. So we may well see another reversal of this rule, and even perhaps restoration of the WF payment, yet. You can be sure,though,  that any such climb-down, if it comes, will be designed to save as much 'face' as possible...much like a certain other troublesome autocrat currently in the news, Starmer could never actually admit he was wrong, could he ?...

Update 29.9.24: The backlash now seems to be intensifying with one of the more forthright Labour MPs actually resigning the whip, with an positively excoriating resignation letter aimed at Starmer and his policies. This 'tour de force' is absolutely 'spot on' in its analysis, and well worth a read. 

Things are now looking distinctly 'un-Rosy' (sorry - couldn't resist that one!) for Starmer, and by implication, Reeves. It's difficult to imagine how they could now be so frankly idiotic as to interfere with any further pensioner benefits, but given their proven stubbornness and naivety, you never know. The key question now is, how many more disillusioned back-benchers will follow Rosie Duffield's brave lead and resign the whip themselves ? I suspect many will keep their powder dry until the Autumn Statement, but will make it clear that any more nonsense will not be tolerated. Starmer will probably be somewhat relieved to have got rid of a notable 'thorn in the flesh', but he will hopefully now realise that she is but the tip of the iceberg, and remember that every MP who actually does resign the whip over the coming months represents an effective loss of 2 in his majority. We know from the Winter Fuel abstentions that there are at least 50 others who might go down this road if things get too bad.

His premiership is likely to be at severe risk if he persist with his present course......time will tell whether he is astute enough for a re-think.....

Update 9.10.24: A quick heads up on the origin of the celebrated 'Tory Black Hole' that Starmer and Reeves have been using as a justification for axeing benefits...

The size of this new ‘celestial’ phenomenon is reputed to be £22Bn, although the calculations supporting it have never been fully verified. To put it properly in context, it was based on an audit performed by the treasury in July, comparing the Spring Budget Forecast of £1226 Bn for total public spending with an updated estimate by them in July. If the updated estimate is correct, it would represent only a 1.8% underestimate of projected spend by the last Government (i.e. well within 'experimental' error for a statistical forecast of this kind). We know the July estimate must also include at least £9 Bn, the amount estimated to be required to fund recent and well-publicised above-inflation pay rises, so that arguably the size of the inherited  i.e. ‘Tory’  black hole should, for the sake of accuracy, be quoted at £13 Bn, pending full verification (i.e. ca 1.1% of total public spend). ASLEF and RMT have already secured a 14% increase over 2023 levels for their train drivers, much of it backdated to 2023. The BMA’s Junior Doctors have done even better, securing a guaranteed 22% increase over 2 years. So we can all see where the 'acute' need for cash to balance the books has really come from….

Looks a bit different when you put things in context, doesn't it....?

Update 10.10.24: Age UK have just released their impact assessment for the means testing of Winter Fuel Payments, which makes chilling reading. This study arose because the Government failed to make a proper assessment themselves before announcing the change and so far have refused to release any formal justification. All credit to Age UK for taking the time to carry out a detailed and 'no holds barred' investigation. It should provide useful ammunition for the legal challenge currently in the courts. 

The up-front message is that by withdrawing the universal benefit, using the government's own definition of poverty (i.e. income below 60% of median UK income) it will affect no fewer than 1.6 million pensioners who are actually below the poverty line, with another 0.9 million just above the line, and a further 0.4 million on an income below that required for minimum living standards also losing the payment. 

A disgraceful state of affairs for any government presiding over a prosperous western economy, let alone one that still ranks at 6th in the world ! They should be ashamed.....how many more of our seniors will they catapult into poverty by removing more of our age-related benefits this Autumn ?

Update 15.10.24: Starmer's increasing unpopularity  already appears to be adversely affecting his party's prospect. As discussed in a previous blog, a useful barometer of a party's standing with the electorate is what happens in local elections. Although the bulk of council seats don't come up for re-election until next May, and not all occur in the same year, there is always a continuous 'trickle' of by-elections in the interim, caused by councillors moving, retiring or just simply getting tired of the role. There are a number of sites which track this phenomenon - see this link for a good example. The cumulative results since May 2024 are quite revealing - Labour have lost a total of 10 seats with the Conservatives picking up 7 of these, with the rest going to the Greens. The Lib Dems are also net losers at minus 2. While its early days, and this is by its nature a small sample, it may well indicate things to come electorally, in the way that opinion polls are notoriously bad at doing reliably. Watch out, Labour, you may have an electoral liability at the helm....

On a slightly different note, An interesting interview with the Transport Secretary, Louise Haigh surfaced last week. The interviewers, one of whom is an ex-New Labour politician himself (and would no doubt have been turning in his grave if he were dead),  actually managed to have 'brow-beaten' poor Louise into an admission that she would not sanction means testing of the free buss pass concession while she remained Transport Secretary. Profound though this statement might appear to be as a statement of intent, we should  be wary of accepting it at face value - particularly since this dear lady has already had one major 'spat' with her lord and master this week over her condemnation of P&O's mass sacking of its employees, and thus her opinions may well not reflect the views of those who actually make the decisions. Whether she remains in her job for long enough even to see the budget provisions is also a moot point.....she is obviously conscious that she is on report and may not 'live to tell the tale' for much longer. The really interesting question for 'the management', of course, is how many more there are with similar opinions on the back benches....quite a few, I would guess. With a total of 420 MPs, this is probably the most potentially uncontrollable back bench assemblage ever - Starmer and the whips will certainly have their work cut out...