Quote Originally Posted by CTMilller View Post
I do think the Labour government have miscalculated in choosing to cut the fuel allowance in the way it has been done.

It comes comes over almost as vindictive since it's one of the first (if not the first) demographic group to be singled out for austerity by the new government. It's been handled clumsily with very little done to explain what the effects are and Labour have thrown away a vast amount of goodwill by going this route.

Had it been part of a range of measures affecting other groups in the community it might at least have given the impression that many others are going to have to sacrifice something.

The amount recovered by the initiative is also arguably small relative to the backlash it has created.

Having said that, I would like to see how many are genuinely going to suffer real hardship as a result of this measure. The figures I've seen suggest that 62% of pensioners have a company pension in addition to the state benefit, one in five have assets in excess of one million pounds and pensioners have had real income growth of 21 to 39% in the last 20 years compared to a 10% increase for working people. Given that those on pension credit will continue to receive the fuel allowance, how many does that leave who will now be pushed into a state of genuine financial hardship as a result of the change?

Perhaps the bar to ineligibility should have been set at a higher level to safeguard those that will fall through the net? Basing it on a declared total pension level of x (varying for singles and married couples) might have been more acceptable.
The optics of the move are certainly poor, although I've argued on another thread that might have been deliberate (in order to send a message that the government is serious about fiscal responsibility- sadly necessary after Brexit made the UK a less attractive place to invest).

It's certainly true that pensioners have done relatively well in recent years. Certainly better than many of the tax payers who fund government spending.

For me, the only real issue is whether the level of income/capital at which the means test is set is the correct one. The government have chosen to base it upon the test for pension credit (a benefit that tops up the state pension). I would imagine that they have chosen that as opposed to creating a new level of bureaucracy to assess a different test.

In respect of targeting other groups, the Labour Party painted itself into a corner by promising not to raise income tax and national insurance for 'working people'. That was probably necessary in a country that wants high quality public services, but doesn't like paying tax.

I suspect that the budget will bring in changes to 'target' the 'better off' by reducing tax relief on pension contributions for higher earners and tweaking inheritance tax and capital gains tax. Any such changes will also attract outrage in large swathes of the press (that also like to complain about poorly maintained roads and the shortcomings of the NHS etc.).