Govt hypocrisy on pensioner perks stinks

The Conservative party is clear. They defeated Ed Miliband and his brand of overly generous welfare combined with heavy handed state intervention.

You would never catch George Osborne spouting socialist-lite policies such as an energy price freeze and rent controls or, heaven forbid, increasing welfare spending by scrapping the so-called bedroom tax.

No sirrreee, that type of dangerous left-wing orthodoxy has no place in a Tory Government led by a bunch of free marketers raised on a 1980s diet of privatization and tax cuts. Fiscal responsibility and free markets is the mantra.

Unless, of course, you are over 65 years old. Then George Osborne becomes a left-wing firebrand.

On welfare. In an era of huge massive cuts to benefits the biggest welfare payment of all – the state pension – is rigged to beat inflation every year.

It is triple locked to grow in line with earnings, prices or 2.5% – whichever is higher. A stunningly generous benefit that will cost billions upon billions over the next few years, never mind decades.

This led to the state pension rising by 5.2% in 2012 in line with inflation as all other benefits were frozen at 1%, way below inflation.

Meanwhile, pensioner benefits such as winter fuel allowance, free eye tests, bus passes and TV licence remain untouched. Even Alan Sugar and Alex Ferguson can sign up for their generous welfare cheques – not because they need it but because they are over 65 years old.

Welfare spending is literally rocketing for the over-65s and being slashed for everyone else. It has been ring-fenced from all cuts in perpetuity.

And then there are pensioner bonds. This allowed over-65s to access Government-backed savings rates of 4% – way above the market rates – until two weeks after a general election.

The Government can borrow money at under 2% but it decided to take pensioner money at 4%. This was a direct £150m bung to pensioners in a bid for votes.

It is the only section of society expected to make no contribution whatsoever to reducing the deficit.

And what about heavy-handed state intervention and anti-business rhetoric?

The energy price cap was branded “Marxist” by David Cameron in 2013 but he is happy to cap charges on auto-enrolled pension schemes at 0.75%.

Whatever you think of it, this is heavy handed state regulation and the direct fixing of prices that has cost companies hundreds of millions.

The Government has just launched a consultation on pension exit charges raising the possibility of more heavy handed state intervention to aid pensioners.

And it has been more than happy to indulge in anti-business rhetoric by bashing pension provider unable to allow over-55s to access their cash immediately.

Last year, ex-pensions minister Steve Webb said he was launching a “full frontal assault” on the pensions industry. This from a Government that has pledged to celebrate business.

Ministers are ready to raise the alarm when wealthy savers can not get hold of their cash immediately. It is ready to bash business and directly intervene in the free market in a way that would have made Clement Attlee blush.

But any other sort of heavy handed intervention for the under-65s is branded crazy. Ed Milband’s proposal to fix rents for a certain period within a tenant-landlord contract was compared to bombing a city by Boris Johnson.

There is a simple reason: old people vote more than anyone else.  In 2010 only 44% of 18-24 year olds voted but 76% of over-65s voted (nearly 9 million votes). All these goodies were dished out to get the Tories re-elected and it worked.

Pensioners turned out in their droves to vote Tory. They sat at home quietly weighing up the financial benefits they would derive from each party and chose Osborne.

The Tories had a 23% lead in over-65 votes in 2015, compared to 12% in 2010, 6% in 2005 and 1% in 2001. Labour had a 5% lead in 1997.

Billions of pounds of public money has been spent on building up that 23% lead and it has proven fabulous politics. Who can blame a politician for playing the game with such brilliance?

But the hypocrisy stinks. For the over-65s the Government has splashed the welfare cash, bashed business and regulated with heavy hands. All the things it claims to despise.

Share:

2 thoughts on “Govt hypocrisy on pensioner perks stinks

  • One thing you haven’t mentioned, Sam, is changing demographics.
    People aren’t dying like they used to, so an increase in the percentage lead in the over 65s results in a much bigger increase in the total vote.
    As I’ve said before on this forum “it pays to vote”!

    Reply
  • Yes. An ageing population means all these perks are getting more and more expensive while the over 65 voting power increases., A conundrum!

    Reply

Leave a Reply