Pensioners up next for Nick Clegg’s axe
The possible removal of benefits for pensioners has been attacked as the beginning of a “slippery slope to undermining our whole pension system”.
In a speech marking five years as head of the Liberal Democrats last night, Nick Clegg signalled his intention to means-test pensioners for a range of benefits – including free bus passes and winter fuel allowance.
The announcement came just hours after it was announced that an extra 300,000 people will be in fuel poverty before Christmas following a round of price hikes. Half of the fuel-poor are pensioners.
The Government is committed to the universal benefits until 2015, and has resisted pressure from Tory backbenchers to signal a cut after the general election.
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But Mr Clegg broke ranks to make clear that Liberal Democrats will “look again” at the benefits, arguing that welfare cash “should not be paid to those who do not need it”.
The Fuel Poverty Advisory Group (FPAG) said the latest round of energy price rises has increased the average annual energy bill by seven per cent, to at least £1,247.
There are already expected to be more than nine million households in fuel poverty by 2016 and the FPAG urged the Government to tackle “spiralling” fuel poverty.
“I just don’t think it’s justifiable, when so many people are tightening their belts, to say multi-millionaire pensioners still receive universal benefits across the board,” said the Lib Dem leader.
Mr Clegg’s comments were seized upon by Ros Altmann, director-general of Saga, who said it “may be a populist headline, but it is absolutely the wrong policy”.
Ms Altmann said: “If Nick Clegg’s policy is adopted, it would punish those who have tried to be self-reliant and give much more money to those who have not saved for their future.
“Will he tell us that rich pensioners don’t need a state pension? This could be the slippery slope to undermining our whole pension system.”
Asked if Mr Cameron backed Mr Clegg on the issue, the PM’s spokesman responded: “The Prime Minister made a commitment to protect those benefits and he believes in keeping his promises.”
But there was dissent on the Tory backbenches, as Broxbourne MP Charles Walker said Mr Cameron should be ready to make the universal benefits taxable as income before the election, to show that the older generation are bearing their share of reducing the deficit.
Further rises in energy prices were also announced yesterday, with major projects to improve the UK’s gas and electricity networks adding an average £12 to bills every year for the next eight years.
Ofgem’s final recommendations allow companies such as National Grid to spend a total of £24.2 billion on investing in new and upgraded infrastructure, more than the £22.7 billion proposed by the regulator in July.
But the figure is still short of the £29.4 billion originally requested by the industry, raising the prospect of a referral to the Competition Commission.