Labour shadow chancellor Ed Balls declared in a speech this morning that if Labour is elected in the next general election, it will scrap winter fuel subsidies for the richest pensioners. About 600,000 people over 75 who pay higher and top income tax rates would be affected. The move forms part of attempts to convince the public that Labour is capable of taking difficult spending decisions, with Balls stressing that Labour will adopt “iron discipline” on spending. It is expected to save around £100m, a relatively small saving of 0.5 per cent of the welfare budget. The announcement is nonetheless significant in heralding a symbolic shift by Labour in the ongoing debate on the welfare state away from universal benefits for the elderly.
Over the past year, Prospect has looked closely at the various issues at stake in the welfare debate. Here are the highlights:
1. Who benefits from welfare? by Philip Collins (£)
Philip Collins’s cover story from our current issue will give Ed Miliband and Ed Balls pause for thought. He argues that the left has to grapple with the dilemma between bolstering the contributory principle of the welfare state, widely supported by the public, and the role of the welfare state as a vehicle of redistribution:
“The public wants a welfare state in which the principle of desert is enshrined but it wants it to be cheaper, not more expensive.”