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Coalition Hints At Bringing End To Universal Benefit

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http://www.independent.co.uk/news/uk/politics/coalition-hints-at-bringing-end-to-universal-benefit-2102577.html

David Cameron's claim to lead a "revolution of fairness" will be put to the test this week as the first wave of incapacity benefit claimants are ordered to find a job and the Treasury considers a plan to strip pensioners of universal benefits.

The Prime Minister uses an exclusive article in The Independent on Sunday to insist the fairness of the looming spending cuts cannot be measured by how much money the state spends on welfare.

But as the axe hovers over funding ahead of the spending review on 20 October, The Independent on Sunday has learnt that the winter fuel allowances paid to all over-60s could be restricted to the least well-off or taxed to limit the sum received by wealthy pensioners. It follows the row at the Tory party conference last week over plans to axe child benefit for high earners from 2013.

The move would strike at the heart of the principle of universal benefits for the elderly and fly in the face of assurances given by Mr Cameron that the payments would be "safe" under a Tory government. Some senior Tories oppose such a dramatic U-turn because of the damage it would cause to the Prime Minister's credibility.

However, with time running out to find the savings before George Osborne's Commons statement in 10 days' time, a number of earlier policy positions have already been abandoned. Business Secretary Vince Cable ditched his call for a "graduate tax" to fund university places.

But the move to alter the winter fuel allowance could prove the most explosive, as pensioners remain the most likely group to vote. It is understood the £250 payment could be limited to people who claim the benefit pension credit, saving £1.5bn a year – more than halving the cost of the scheme. Liberal Democrats are also pushing for the benefit to be taxed. Mr Cable has acknowledged that it is "odd" that he receives the payment.

Some ministers suggest raising the qualifying age from 60 to 66 – and cutting the basic payment. Lib Dem Energy Secretary Chris Huhne increased the pressure yesterday, when he said the fuel allowance had to be looked at "to make sure we're getting value for money".

Research by the charity Age UK reveals 40 per cent of the public believe the winter fuel allowance should be spared from cuts. In an experiment at each of the party conferences, the charity also surveyed an audience of Liberal Democrat, Labour and Conservative delegates to see how their views differed. Only 15 per cent of Tories said the allowance should be protected, dropping to 11 per cent of Lib Dems surveyed. Some 55 per cent of Lib Dems said the allowance was among the "two or three least important to protect from cuts".

With the Government apparently signalling an end to universal benefits, the Age UK poll also showed 73 per cent of the public opposes means testing. Only half of Tories surveyed at the party conference agreed that "everyone who has worked hard and paid taxes all their life deserves the same support from the Government in old age".

Michelle Mitchell, Age UK's charity director, said: "With the lives of thousands of older people at risk if essential care services are cut, the Chancellor will not quickly be forgiven if he fails to support the oldest and frailest, who rely on public services the most."

The think-tank Demos said the Government's proposed benefit reforms would see 3.5 million disabled people miss out on £9.2bn by 2015 – with the plan to move disabled people on to jobseeker's allowance accounting for half the losses.

The first wave of long-term claimants of incapacity benefit will be ordered back to work from tomorrow as new figures reveal the bill for keeping two million people on the sick has topped £133bn in the past decade. Two pilots to reassess claimants for their fitness to work begin in Burnley and Aberdeen, with only those in genuine need allowed on to the employment and support allowance (ESA). A trial to assess all new claimants for ESA from October 2008 to November 2009 showed only 6 per cent were unable to work at all.

It comes as the Lib Dem minister in charge of the spending review said his party must take ownership of the cuts. Danny Alexander, the Chief Secretary to the Treasury, said the decisions made in the next 10 days would be "guided" by his party's values. In a speech at the Scottish Lib Dem conference, Mr Alexander warned the spending cuts will "have consequences for every single person in this country".

The coalition is also preparing changes to university funding that could lead to massive increases in the cost of gaining a degree. An independent review this week by Lord Browne is expected to lead to increased tuition fees, more expensive student loans and restricted access to grants.

Yesterday, Mr Cable wrote to Lib Dem activists admitting he had been wrong to propose a graduate tax, which was "clearly not the right vehicle". "While it is superficially attractive, an additional tax on graduates fails both the tests of fairness and deficit reduction," he said.

It was reported that senior ministers have already agreed that graduates in highly paid jobs should pay back more than the cost of their degrees, to subsidise those who are less successful.

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With all due respect to that genuinely worked for it, the elderly do receive quite a bit overall. Most of the welfare state spending is actually on pensions. In addition, free or greatly reduced travel costs, the aforementioned winter fuel payment etc etc.

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Means test everything.

I bet they u-turn when the pensioners rebel though.

This is going to be such a load of blox.

Cuts need to be made but no one is going to want them... but someone has to make the decision. It would be easier if they cut from the top down - so increased tax for the very rich first, then picked on the rich, then the not so rich... That doesn't mean the poor keep getting everything ... or the old... no group should be exempt.

The welfare system is a way of life and that needs exstinguishing... you can not breed unlimited on benefits and keep expecting someone else to pay.

Edited by SarahBell

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Also looks like I'm going to be punished for getting my career restarted after university, along with anyone else who actually uses a degree properly. Great... :blink:

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Yes, why are old duffers trundling along to buy half of John Lewis in their brand new Hondas getting special benefits? Crazy.

How about if you work and save for (eg) an occupational pension, each pound of such a pension should see you a pound better of than you would have been if you hadn't worked and saved for it? Subject to prevailing income taxes of course, but not special clawbacks.

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How about we scrap ALL benefits.

Then you apply for a universal benefit and fill in all your financial information and are give X amount per week up to a maximum of £300.

No housing benefit, no council tax benefit, no tax credit, no child benefit, no winter fuel allowance.

Or is that just too easy and do away with hundreds of thousands of jobs?

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How about we scrap ALL benefits.

Then you apply for a universal benefit and fill in all your financial information and are give X amount per week up to a maximum of £300.

No housing benefit, no council tax benefit, no tax credit, no child benefit, no winter fuel allowance.

Or is that just too easy and do away with hundreds of thousands of jobs?

Go one step further to a citizen's wage. Every adult Brit gets £150/week, regardless of income or need. No income support, no HB, no disability allowance, no state pension, no breeding allowance.

Simple to administer.

Encourages working - you don't work you get £150. You earn £10 you get £160. You earn £100 you get £250. You earn £1000 you get £1150.

Stops benefits tourism.

Stops people complaining about fair/unfair.

Taxes may have to go up for it, but hey, as a taxpayer I would be happy to pay more tax to see a scheme like this, even though my wife is a non-Brit and I have kids. Before long it will see more people work, the economy will pick up, tax revenues increase, and the tax bill goes down.

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Yes, why are old duffers trundling along to buy half of John Lewis in their brand new Hondas getting special benefits? Crazy.

I agree. I think they have stolen enough from the young already.

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Go one step further to a citizen's wage. Every adult Brit gets £150/week, regardless of income or need. No income support, no HB, no disability allowance, no state pension, no breeding allowance.

Simple to administer.

Encourages working - you don't work you get £150. You earn £10 you get £160. You earn £100 you get £250. You earn £1000 you get £1150.

Stops benefits tourism.

Stops people complaining about fair/unfair.

Taxes may have to go up for it, but hey, as a taxpayer I would be happy to pay more tax to see a scheme like this, even though my wife is a non-Brit and I have kids. Before long it will see more people work, the economy will pick up, tax revenues increase, and the tax bill goes down.

How about, for every £1000 earned, you lose 1%, so that someone on £100,000 would get nothing. This would allow for a higher citizen's wage to be given.

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How about, for every £1000 earned, you lose 1%, so that someone on £100,000 would get nothing. This would allow for a higher citizen's wage to be given.

I dunno. Someone on £200,000 would lose £400,000. I like where you're going, but there's something I can't quite put my finger on...

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I dunno. Someone on £200,000 would lose £400,000. I like where you're going, but there's something I can't quite put my finger on...

I mean you lose 1% of the £150 citizens's wage, so someone on £50,000 would be given £75 per week (on top of their net salary), someone on £100,000 would recieve £0 and someone on £200,000 would also recieve £0

Edit: per week

Edited by fellow

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I mean you lose 1% of the £150 citizens's wage, so someone on £50,000 would be given £75 per month (on top of their net salary), someone on £100,000 would recieve £0 and someone on £200,000 would also recieve £0

i dont know about you but thats going to massively incentivise me to drop my theoretical earnings from 6 figures down to 50k

Edited by Tamara De Lempicka

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i dont know about you but thats going to massively incentivise me to drop my theoretical earnings from 6 figures down to 50k

So you would want to drop your income by £2500 per month so that you don't lose £75 per week?

Edit: per week.

Edited by fellow

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I know a pensioner on a big pension (ex public sector!) and him and his goes to Spain for 6 weeks every winter to escape the worst of the cold. He still pockets the winter fuel allowance though!

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How about, for every £1000 earned, you lose 1%, so that someone on £100,000 would get nothing. This would allow for a higher citizen's wage to be given.

That's called income tax. We have too much of it already, not least 'cos of the trouble politicians have with meaningful alternative forms of taxation.

1% of £150 is £1.50, which is 0.15% of £1000. But I expect you're mixing numbers there, with one figure being weekly and the other annual, so you're actually suggesting 7.8% on income tax. Fairer than means-test precipices, and I could be happy with that if they use the savings on benefits this replaces (and associated red tape) to reduce income tax, so the extra economic activity generated by closing the benefits trap becomes a pure bonus.

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That's called income tax. We have too much of it already, not least 'cos of the trouble politicians have with meaningful alternative forms of taxation.

It's not a tax but a reduction in benefits. If you are suggesting that loss of benefits is a tax then I am currently paying well over 100% tax on my earnings.

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The real issue is that Camoron promised, in his setting out his stall for election, that free bus travel and winter fuel allowence would not be cut.

If he goes back on that pledge, he should resign. He would be seen by everyone that he is a mountebank and unfit for the job he holds.

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I know a pensioner on a big pension (ex public sector!) and him and his goes to Spain for 6 weeks every winter to escape the worst of the cold. He still pockets the winter fuel allowance though!

I suppose it's quite annoying that he can do things you'll never be able to afford?

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The move would strike at the heart of the principle of universal benefits for the elderly and fly in the face of assurances given by Mr Cameron that the payments would be "safe" under a Tory government. Some senior Tories oppose such a dramatic U-turn because of the damage it would cause to the Prime Minister's credibility.

ALL benefits aren't universal for the elderly but it's fair to say that the winter fuel allowance is - depending on age. In fact the winter fuel allowance, bus pass (both after 60) and TV licence (after 75) are just about the ONLY truly universal benefits for the elderly.

The state pension requires NI contributions although if you aren't entitled to that if you are pension age you can get other benefits instead.

Whatever the justification for and against the winter fuel allowance the proposals would be another election promise reneged on.

Promises promises.

If they've got to limit it why not just exclude bankers and MPs from it especially the bail-out bankers. Maybe estate agents and property developers as well. Oh and they could add TV property programmers to that list and newspaper property pushers - before long you are talking big savings.

Edited by billybong

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Pensions are taxed right?

Well, why can't they pull the same trick as child benefit? If you are a pensioner with an income over say £12K you don't get free bus passes or winter fuel allowance or TV licence, etc etc.

If you don't think £12K is enough to live on, then tough shit and downsize you *******.

Edited by daiking

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Pensions are taxed right?

Well, why can't they pull the same trick as child benefit? If you are a pensioner with an income over say £12K you don't get free bus passes or winter fuel allowance or TV licence, etc etc.

If you don't think £12K is enough to live on, then tough shit and downsize you *******.

If only everyone's income was distributed via the goverment's bank account. That way they could make all the deductions necessary to ensure every comrade received the same amounts.

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If only everyone's income was distributed via the goverment's bank account. That way they could make all the deductions necessary to ensure every comrade received the same amounts.

Do you want to pay universal benefits to all or not? If yes, do you think you could sub me the CB I'll be losing from 2013?

Thought not.

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