Pensioners understandably squealed in pain when Rachel Reeves told them she was taking away their Winter Fuel Allowance worth £300 for the over 80s and £200 for those younger.
No one likes to have money whipped off them, and given older people were the only group hit in the Chancellor’s clawback other than Whitehall consultants and sacked ministers with reduced severance, it’s no surprise they felt particularly aggrieved at the unfairness of it all.
Reeves was forced into this because, she says, the Tories failed to be honest about the national purse being emptied to the tune of £22billion.
I watched in the Commons as the normally perma-smiling shadow Chancellor Jeremy Hunt went redder in the face with anger as the accusations pelted him like rotten tomatoes. He was only able to mutter in defence that Reeves’ tale of woe was a “cock and bull story”.
Reeves claims the Tories failed to be honest about the national purse being emptied to the tune of £22billion
PA
But that protestation of innocence began to unravel as, first, the Institute for Fiscal Studies put out a tweet agreeing that these new figures did indeed seem to show that the £9billion the Treasury holds in reserve for stormy weather had “been spent several times over.” Then the Office of Budget Responsibility issued a statement saying they’d been kept in the dark, too.
But Reeves’ vindication will be of little comfort to 10 million pensioners who will lose their nice little winter windfall. Age UK says two million of them now face a choice between heating and eating.
Former Pensions minister Ros Altmann goes further. She thinks this is even worse than scrapping the triple lock, adding: “This a real body blow for millions of pensioners.
“I do hope the Government will reconsider. This makes a mockery of the pledge to protect the triple lock, which offers a minimum 2.5 per cent increase. Yet removing £300 Winter Fuel Payments amounts to a 3 per cent cut for those on the Basic State Pension.”
MORE AGENDA-SETTING OPINION:In defence of Reeves, 1.5 million of the poorest pensioners will keep the handout as they fall below the £11,300 limit which qualifies them for Pension Credit.
And she urged all pensioners who think they are entitled to credits to apply for them if they haven’t already. I repeated that plea on GB News and will keep doing so each time this subject comes up.
The universal allowance was not a good use of taxpayers’ money if it ended up in the pockets of richer pensioners who have healthy sums coming in from workplace schemes. I know of one such well-to-do elderly gentleman who calls the winter allowance his Claret Fund.
I’m sure taxpayers will agree that the cost of getting him sloshed should not fall on their shoulders.
Altmann reckons a better way to recoup cash would be by rolling the allowance into pensions so it can be taxed. I can see the fairness in that. But it would not raise the £1.4billion this year, and £1.5billion the next that Reeves' more draconian measure will.
Ros Altmann thought Reeves's decision was worse than axing the triple lock
Getty Images
Perhaps this is the point when we should begin considering pensions as a whole and how we can give older folk a decent and dignified post-work life without breaking the bank.
It has become a bit of a cliche now, but needs repeating nevertheless: the cost of pensions next year will be more than the budgets for defence, education and the police combined.
Average life expectancy in the 1950s was 69 - so for many people, the state only had to support them for an extra four years. Now it is 82, and set to rise to a point when some people will spend a third of their lives in retirement.
Meanwhile, the 3.5 workers paying taxes now to support each pensioner will be down to 2.5 by 2030. It is a myth we paid for our own state pensions through National Insurance; that money went to those who were then retired just as today's workers pay for today's pensioners.
The triple lock will be preserved for the next five years by Labour, but we have to be realistic that it cannot last forever.
It is right that pensioners should receive the highest of earnings or prices. But when inflation and wages flatline is it right pensioners still should get a guaranteed 2.5 per cent hike in their incomes?
The IFS calculates that the 2.5 per cent - which has been used three times since 2011 - delivered pension rises of 60 per cent compared to 42 per cent if they had been based solely on CPI and 40 per cent of earnings.
As we live longer, healthier lives we can work longer, too. And this is where reforms are most needed. The default retirement age which meant bosses could force workers out when they reached it was abolished in April 2011 following a successful campaign by Age UK.
It should have meant employers not getting rid of older workers until they were ready to go. Bosses get around this by making them redundant instead.
That has to change. The 2014 Pensions Act means between 2026 to 2028 the pension age will go up to 67. From 2044 to 2046 it will be 68. You can bet it will rise further. It would be unconscionable to chuck someone out of a job at 65 and then make them wait for two or three years for their pension.
Age is a protected characteristic. And to protect it properly the only redundancies a solvent company should be allowed to make for workers reaching retirement age and beyond are voluntary ones.
I declare an interest here. I’m an older worker myself.
