Pensioner Politics

So it has finally happened, Ian Duncan-Smith's Quest to for the Holy Grail of Reduced Welfare Spending culminated last week with a plea for wealthy pensioners to consider giving back their benefits. And IDS had a similar level of success as the Python's King Arthur when he stood outside the French castle and asked nicely if he could come inside to have a look at their grail. Whether Britain's well-off pensioners will fire a barrage of farmyard animals at him remains to be seen. Judging by the fury even this modest proposal provoked, he might want to keep one eye on the sky for incoming cows.

Defending the current situation where pensioners, regardless of income or wealth, receive a range of benefits whilst every other part of the welfare budget faces cuts is a tough challenge. Peter Hain, the shadow spokesperson, valiantly rose to the task in recent weeks with an argument that can be summarised thus: cutting any payments is difficult, the total spend in these categories is only £4 billion so why bother when set against a welfare bill close to £200 billion and a deficit of £125 billion. A superficially convincing argument, until you realise it is in effect a mandate for limitless spending in perpetuity.

Harriet Harman says today that Labour would review these benefits; whereas David Cameron has pledged them until 2016. All sides of the political debate, are playing pensioner politics and it does not bode well for this country's long term prospects. Unless you are to the left of Tony Benn which few save Ken Loach and Fidel Castro are, most people of any persuasion accept that Britain's state spending needs to be reined back. Furious arguments rage whether cuts should happen now or later; yet few seriously dispute the need to bring spending in line with income at some point.

If you were a rational, wise person acting in the national interest i.e. not a modern politician, then on reviewing the government's spending, you would conclude that the best area to make savings would be the largest category total, namely welfare (c. £190 billion). And continuing this absurd fantasy, imagine this rational person ignored the clamour of politics and delved deeper into that massive number only to find that half goes on state pensions.

This sage person discovers many of those in receipt of the basic state pension have significant private income and personal wealth. These wealthy pensioners are the ones IDS wants to their additional benefits. They won't hand anything back of course. In fairness, I wouldn't either unless forced to do so. When it comes the cash transfers from the individual to the state, the only reliable method is compulsion with the threat of prison. I can think of a 1,000 things I would rather do with the money government takes off me in tax. But you can't leave these things to individual’s discretion to pay (unless you are a very high net worth person and then you tell HMRC what to do).

Pensioners and their payments are the political third-rail, to touch them is death; the old are vocal and they vote unlike the young who prefer Twitter and abstaining. The grey lobby explains the hard man of welfare reform resorting to shaking his collection tin. His mistake was doing this himself, a far more effective campaign would include a picture of an abandoned Scotty dog or a lame donkey. 

Removing these additional benefits for the well-off would set a positive precedent for welfare spending. Instead of hosing down the country with money, we might consider targeting the cash to those most in need. Sadly, given the venom provoked by IDS's meek request for common sense, it seems pensioner politics wins over reason every time.