What are the Tories really up to on pensions?

It looks like the Conservatives want to fight the next election on welfare reform.

Yesterday CFO George Osborne did “bad cop” stating he wanted another £12bn off the welfare budget in a “year of hard truths”, the day before CEO David Cameron had been “good cop” dishing out pension promises from Widow Twankey’s apron.

After such a crazed mixed metaphor , you may be tempted to press “escape” -  but stay with me, George and David may be singing from the same panto-script -vilans both

Purists may object to this kind of stuff but it is the way politics works in a social media savvy age when you have but 140 characters to play with! This is poltics today and we'd better get used it! Politics mixes with evrything and those badgers keep moving the goalposts!

So what is Cameron really playing at? How did Gargoyle George let him give away so much for so long? Well let’s start by looking at who is really going to benefit from the triple lock. It isn’t going to be the really poor pensioner.

The Pension Credit already lifts them way above the levels of the triple lock so this is no give-away to the improvident. Indeed, bringing the Basic State Pension closer to Pension Credit makes more sense of auto-enrolment for the low-paid. It’s not hard to see 2020 as the target date for the turning off of Pension Credit for all but those carers and long-term sufferers of chronic illness and disability.

Put in this context, the opt-out decision looks a little more important. Will Labour or the Liberals spring to the defence of pension credit? Frank Field is a key figure. No fan of means tested benefits, I suspect the demise of Pensions Credit is something devoutly to be wished for by the great man.

I predict cross-party support for a policy of improved personal provision (via AE) and a strong BSP.

But a more interesting question surrounds the introduction of the new Flat rate Basic State Pension being rolled out from 2016. What we don’t know is whether the triple lock will apply in the same way to that (or whether the triple lock will just be used as a way of getting the current pension slowly up to the higher level. If the triple lock is to be applied equally to the new higher BSP (as to the existing scheme) then Cameron really is making a promise!

But I very much doubt it will be. The Financial Times has warned Osborne of “fetishing” his target of getting a budget surplus by 2019, but I suspect that is exactly what is happening in the Treasury right now. Labour and Liberals need to probe hard on this point. The pension benefits to those in and approaching retirement have been paid for by a lifetime of hard work and national insurance payments. They are “owed”.

The BSP is still pitiful (by comparison with all our European neighbours). The triple lock may not be the most logical of constructs but it is the way we have in place to get the BSP back into shape. Cameron has spoken and spoken fine words about the dignity of old age. Now is the time to make absolutely sure that what he is promising is meaningful and not just a clever con-trick by the Treasury, played on the elderly and particularly the elderly poor.

The triple lock should be a gift-horse. Unless it brings sustained benefits over and above the current promise, it will be a Trojan Horse , wheeled in to rid us of pension entitlements to the poor, abandoned once the destruction is complete.

 
 

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