Originally published in The Times on 3rd November 2013.
An iron law of politics states that you should never pay for benefits for new recipients by cutting those for existing recipients. The gainers will give you no credit for giving them what they transparently deserve; while the losers will howl with outrage.
Paul Burstow, the former Lib Dem social care minister, is looking to defy that law. He wants winter fuel allowances to go only to those who need them. The savings would fund the Dilnot report’s proposed cap on what old people have to spend on care.
This makes eminent sense. Winter fuel allowance was a Gordon Brown gimmick, an attempt to bribe the electorate with its own money. Brown is gone, but the state picks up the bill.
That Burstow is a “former minister” is however relevant. Nick Clegg has hinted that he shares his view and even David Cameron has not shown much enthusiasm for these hand-outs. But they are treading carefully. Neither contemplates abolition before the next election. If after the poll they were to dare to ditch them, that would be in time to fund Dilnot, whose costs will not be incurred until 2018 at the earliest; but even so, it would be what Sir Humphry would call “brave”.
Many people still think of old people as poor. But those now retiring are better off than any before. As a recent Institute for Fiscal Studies paper shows, “pensioners have seen their incomes increase more quickly than those of working age over the past 15 years.”
Partly, this is good fortune. This is a generation that increasingly benefits from generous second occupational pensions, and which, moreover, owns homes which have appreciated enormously in value. Partly it is government largesse. The anomalous tax-free lump sum on retirement lives on; free fares and (for over 75s) free TV licences lower pensioner living costs; and the coalition’s Brown-style bribe in providing a triple guarantee for basic pensions, so they rise the fastest of 2.5%, earnings and prices, means their share is ever increasing.
The old are doing well – that is, until they reach the age and state of health where they need social care. Then, they hit the wall. Care services provided by local councils are being cut, so only those with substantial needs are met, and then often poorly. Council fees for care homes are too low to fund the standards older people deserve. And more and more older people face crippling care bills. State aid with these is subject to a vicious means-test which means that those with more than £23,250 in assets have to fund their own care in full. People who have saved all their lives are left with nearly nothing.
Mr Burstow’s proposal is not the only way to pay for Dilnot. I am chairing an expert conference at the House of Lords on January 23 to examine the possibilities. Yes, let us choose the one that will best muffle the howls of the losers. But not funding Dilnot should not be an option.