Back in October 2010 I first wrote very scathingly about the announcement by Steve Webb, the Pensions Minister, of a huge increase in the basic state pension. Recently an article in The Times suggests that it may not be such an illusion and after a tough battle with the Treasury, our Magical Minister might be winning the argument. I am not apologising yet though and it may not turn out to be such a good trick after all.
Lets look back at the positives:-
The confidently spoken assurances that are designed to lull you into a false sense of security. £140 is a whopping 40% increase for single pensioners and a massive 75% extra for married couples. What could you possibly not like about that? The other great virtue is that such big increases will sweep away means testing for thousands of pensioners. It’s all such a tantalising offer that you really want to believe it.
As with all great tricks, there are always a few lingering doubts – it’s the art of the conjurer to convince you to overlook them.
The doubts are all about “how is it all going to be paid for ?” That was why the Treasury was not fully persuaded that the trick could be pulled off successfully.
The overall cost of the measure was helped by the fact that it was not going to be introduced until 2015, and then only for new pensioners. Politically this would seem to make the trick impossible, since all the older pensioners would vote against any Government that performed such an unfair trick.
So what else has the Magic Minister got up his sleeve. Firstly, by taking more people out of the means test, it denies them a ‘passport’ to other benefits (Pension Credit and minimum income) which is giving to the poorest pensioner in one hand and then cruelly taking it away with the other. The second deception is even harder to detect because it probably involves taking away non-means tested benefits such as Attendance Allowance and Winter Fuel Allowance. Surely this is a step too far, although it has been suggested before no-one has been bold enough to try it. YET!
At the end of every great illusion you are meant to be baffled and amazed, so I hope I am wrong about how this trick is to be performed. Otherwise the Magic Minister will have succeeded in shifting money to the wealthiest elderly people only be taking it away from the poorest and frailest pensioners.