Wednesday, 9 January 2013

Ha! Now for the pensioners!


Pensioners are hitting the front pages as the government points its finger of fate at its next vulnerable victims.  They've had their fun with the disabled and the jobless who have been suitably bullied and harassed for the time being, and as IDS explained, are being "helped to move on".  Now to well and truly turn the country against the pensioners before doing the dirty on them.

Immediately after winning the vote to take the Welfare Reform Bill to a second reading, the government insisted that pensioners are protected against their proposed legislation.  But by the late-night Sky Press Preview the question was raised about who are the 'givers' and who are the 'takers' in our society, a variation on the 'strivers' and 'scroungers' theme so beloved by the government. Back in the Autumn, the coalition's allegedly 'caring' regulator Nick Clegg may have hoped he could claw back a point or two in the opinion polls if he came down hard on the universal nature of the pension system:

"I cannot stress enough that what I mean is people, who are very wealthy indeed, receive off millions of ordinary taxpayers across this country free bus passes, TV licences and winter fuel support; even though they frankly don’t need it."

He cites Sir Alan Sugar and Peter Stringfellow as examples of very-wealthy-indeeds who receive these benefits. 


Somehow, even the most avid supporters of universal benefits and of pensioners constantly fail to mention that pensioners ARE taxpayers.  Whether they work or not they pay tax at the same rate as everyone else. They pay tax on their pensions. They have paid all their working lives towards their old age and towards the public purse and they continue to do so. Only the poorest pensioners, like the poorest wage earners, are exempt from tax, because they are below the tax threshold. The richer the pensioners, the more tax they pay, and have paid, and the "millions of ordinary taxpayers" of whom Clegg speaks include millions of pensioners. 


Pensioners do not automatically "receive", for example, their bus passes, as Clegg wrongly claims.  These have to be applied for, forms have to be filled in and submitted. So when the likes of Matthew Paris and Polly Toynbee complain ad nauseum about how ridiculous it is that they and other well-off pensioners receive bus passes that they don't need, they can stop fretting, because they need never apply. It is often mentioned with great hilarity that the Queen is entitled to a bus pass, but there is a difference between being entitled to one and actually applying for and using one. And there are many pensioners, who, as they get older, are unable ever to use a bus pass because of mobility problems which prevent them from travelling on public transport.  So many pensioners neither have, nor use, nor are able to use a bus pass.

But even if the small number of "very wealthy" pensioners did decide to apply, the passes and other pension benefits are not "freebies" and "handouts" as The Sun provocatively claims.  Alan Sugar was quick to point out to Clegg in disgust and not surprisingly, that he doesn't have a bus pass, but "even if I did have a bus pass, I’ve personally paid tens of millions in tax, my companies hundreds of millions in the past 45 years."  He and other rich pensioners are entitled to one taking into account the contribution they have made and continue to make to the Treasury. Though most of them wouldn't be seen dead with one, and pay their fare if and when they travel by public transport.

Clegg also seems unaware that free TV licenses are only available to the over-75s, and as Lord Sugar and Peter Stringfellow are 65 and 72 respectively, neither is eligible.  Clegg should get his facts right. The current average life expectancy of a male in the UK  is 78 and a female 82 so this can be a very short-term benefit, and even then only if you are lucky enough to live long enough to receive it.  

The majority of our current pensioners are not wealthy. Far from it. They struggle to make ends meet as they watch their benefits already being cut while their savings, if they have any, dwindle away, accruing no interest of which to speak. Retail prices have risen to unaffordable topped by increased VAT and the 'heating or eating' option is very real. Running a car is pricing itself out of the market. 

Lib Dem, Paul Burstow, has proposed this week that the winter fuel allowance be means tested. You might think this would be aimed at weeding out the richest or perhaps the ex-pats living in hot climates, but that isn't the case. Burstow recommends that 3/4 of all pensioners lose the allowance, that is all those who do not receive pension credit.  It would hit most pensioners very hard at a time when energy bills are soaring.

The government may advocate means testing when it comes to giving, but they have no problem with it when it comes to taking.  Every pensioner whatever their financial situation was targeted in the 2011 Budget, when George Osborne decided to cut the winter fuel allowance without notice from £250 to £200 for those aged 60-79, and from £400 to £300 for those 80 and over, cuts of a fifth and a third. The cuts did not appear in the 100+ page Budget document and came as a shock to pensioners, especially as it happened weeks after the big six power firms hiked the price of gas and electricity and have continued to do so.

The proposed introduction in 2015 of a flat rate pension of £140 for all new pensioners will disadvantage all existing pensioners whose basic pension of £107.45 will fall substantially short even with the expected annual increments. And it is not  yet clear if the £140 is a cap amount or if it will increase each year in line with inflation.

As well as hitting current pensioners with cuts, savings are already in place for the future before any further adjustments. By raising the age of retirement incrementally from 60 and 65 for women and men respectively to 67 for everyone (and it has been suggested that this could rise to 74) the government's commitment to pensioners has been massively reduced.

We all know too well that steps must be taken to fix the deficit which the government claims is the necessity for benefit cuts.  People are living longer and are expected to continue to do so in the years to come. The pension system has to be reviewed, and I'm not making a case for "very wealthy" pensioners, as they really can look after themselves, though they do make a large contribution to the Treasury, and at the same time as Nick Clegg woos the electorate with promises of cutting universal benefits to the wealthy, his government has given the richest a very generous, means-tested 5% tax cut while universally abolishing tax relief for all pensioners over 65.  But I am making a case for keeping the pension benefits universal for existing pensioners, as they are self-regulating.

When it comes to a choice between means testing or self-regulation, the latter might well be the most financially and administratively sound way to go.  Means testing would be an expensive and an administrative nightmare and if outsourced millions of pounds would be diverted from the national pension pot into private coffers.  As we've seen with the ATOS work capability assessment, Child Benefit, the Welfare Reform Bill, the winter fuel allowance cuts, to name but a few, the government just can't be trusted with the concept of 'fairness'. How would a "better-off pensioner" be defined? If assets are taken into account to determine wealth, which has been suggested, no home-owning pensioner would be eligible for any benefits, however little money they have to spend each week. Given the example of the government's pride and satisfaction with ATOS's target-driven assessments, there is no reason to suppose that pensioners' means testing will not turn out to be the same ruthless method of getting rid of as many dependents as possible without a thought for the consequences.

And there is the wider picture. It shouldn't be overlooked that pensioners support the economy free of charge. They care for grandchildren to enable their children to work and pay tax. They care for very elderly parents whose community care has been withdrawn or become unaffordable. And many have the true "big society" ethic giving their time to charities and communal projects. It is because they don't have jobs that they can do all this, and of course, I must say it again as no-one else ever does, they are tax payers. Pensioners are an undervalued asset.

I lay in bed the other night tossing and turning. Hope that's not too much information. I was angry. I fantasized about a new political party: The Grey Party. The Green Party has only around 12,500 members in England and Wales. Statistics based on the 2011 census show that there are 9.2 million people in England and Wales of pensionable age. One in six people in the UK are over 65. There are more people of pensionable age than there are people under the age of 16. Many older people live alone and are not on line. They do not generally have contact with social networks and so are unable to express their views widely. But what older people do is vote. They are a massive and powerful lobby. No politician can afford to forget this. By all means let us find a better and more sustainable way for the future, but stop persecuting today's pensioners at the end of their lives.  Look at the numbers. It isn't worth it.


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