Labour considers curbs on universal benefits to pay for social care

  • Labour is looking at plans to cut winter fuel allowance and other benefits for better off pensioners to use the cash to help fund social care for the elderly.

    Report by: Patrick Wintour, political editor The Guardian, 03/10/2012


    /images/blog/open_quote.jpgThe move is being described as symbolic of its new "One Nation Labour" philosophy.

    After claiming Disraeli's "one nation", slogan in his conference speech in Manchester on Tuesday, Miliband introduced the concept of One Nation Labour at a follow-up question and answer session in Manchester on Wednesday. He wants to use One Nation Labour to demonstrate that new and old Labour have been superseded.

    Miliband, basking in the praise lavished by his party on his no-notes conference speech, also confirmed that he will attend a TUC anti-cuts demonstration on 20 October and called some of the delegates "comrade", the traditional socialist greeting. However, the first poll indications suggest the speech has achieved no cut through, and done nothing to improve his ratings.

    One explanation is that it had relatively little impact on the TV bulletins, owing to competing news, but it also shows the wall of scepticism Miliband faces among the public. Labour's position on social care is important because the Liberal Democrat social care minister, Norman Lamb, is seeking crossparty consensus on how to fund a cap on social care costs. Switching spending away from wealthier pensioners is seen as one way of raising the cash to implement the plans set out by the economist Andrew Dilnot for the government.

    Dilnot proposed to cap individual costs of care for elderly and disabled people at about £35,000. The proposals might cost more than £1.8bn a year, but the Treasury has been reluctant to release the money.
    A report by the Institute for Fiscal Studies suggested in June that means-testing the winter fuel allowance and TV licence could raise £1.4bn a year, almost enough to cover the Dilnot proposals. The thinktank also suggested charging National Insurance on employers' contributions to private pensions and abolishing the entitlement to tax free lump sums could raise almost £3bn.

    Labour support for withdrawing benefits from wealthier pensioners would be similar to Liberal Democrat proposals, but it may be impossible to reach agreement in this parliament as David Cameron has made a commitment not to touch the value of pensions for the wealthy. Lamb has suggested it might be necessary to appoint an honest broker between the parties to try to secure a consensus. The shadow work and pensions secretary, Liam Byrne, hinted at the possible move in an interview this week saying:

    "There's always been a balance in the welfare state between universal benefits and targeted benefits, and I am afraid as part of Ed Balls' zero-based spending review that balance has got to be looked at."

    Miliband's aides were on Wednesday trying to show how One Nation Labour might have electoral appeal. They suggested voters had turned away from the last Labour government because some workers felt there was no route into employment for their children.

    They also felt immigration was making their life more difficult, and no one cared. They considered New Labour did not do enough to reassure this group of voters that people at the top would be expected to display responsibility.

    Addressing this theme, Miliband told his conferenence:

    "One Nation is incredibly important to us as a country and us as a party. Old Labour is not going to answer the challenges we face because it can't stand up for the whole country. But nor is New Labour, because it was too silent about the responsibilities of those at the top and too timid when it comes to the vested interests of our country."
    "If you take what we have announced on vocational qualifications, on apprenticeships, or what we have said about immigration and some of the concerns we have overlooked it is understanding who we left behind as a party as well as understanding that we need to make sure responsibility goes right the way to the top."

    Miliband also courted controversy with the rightwing press by saying he will attend a trade union-organised march against government cuts this month. The demonstration, labelled "A future that works", is due to take place in central London on 20 October. Asked by a union member at Labour's annual conference in Manchester if he would join the protest, Miliband replied that he would "be there". Unions have criticised Labour for supporting a public sector pay freeze.

    Miliband also tried to deal with an omission in his conference speech by speaking extensively on climate change, and called for aviation emissions to be brought into national carbon budgets./images/blog/close_quotes.png

    Full article available here.



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