Pensions and winter fuel allowance of the better-off may be cut as party tries introduces new ‘One Nation’ concept
Labour is looking at plans to cut winter fuel allowance and other benefits for better off pensioners to use the cash to help fund social care for the elderly. The move is being described as symbolic of its new “One Nation Labour” philosophy.
After claiming Disraeli’s “one nation”, slogan in his conference speech in Manchester on Tuesday, Miliband introduced the concept of One Nation Labour at a follow-up question and answer session in Manchester on Wednesday. He wants to use One Nation Labour to demonstrate new and old Labour have been superseded.
Miliband, basking in the praise lavished by his party on his no-notes conference speech, also confirmed that he will attend a TUC anti-cuts demonstration on 20 October and called some of the delegates “comrade”, the traditional socialist greeting.
However, the first poll indications suggest the speech had achieved no cut through, and done nothing to improve his ratings. One explanation is that it had relatively little impact on the TV bulletins, owing to competing news, but it also shows the wall of scepticism Miliband faces amongst the public.
Labour’s position on social care is important because Liberal Democrat social care minister Norman Lamb is seeking crossparty consensus on how to fund a cap on individuals’ social care costs. The idea of switching spending from wealthier pensioners to fund social care is seen as one way of raising the cash to implement the plans set out by economist Andrew Dilnot for the government.
Dilnot proposed to cap individual costs of care for elderly and disabled people at about £35,000. The proposals might cost more than £1.8bn a year, but the Treasury has been reluctant to release the money.
A report by the Institute for Fiscal Studies suggested in June that means-testing the winter fuel allowance and TV licence could raise £1.4bn a year, almost enough to cover the Dilnot proposals.
The thinktank also suggested charging National Insurance on employers’ contributions to private pensions and abolishing the entitlement to tax free lump sums could raise almost £3bn.
Labour support for withdrawing benefits from wealthier pensioners would be similar to Liberal Democrat proposals, but it may be impossible to reach agreement in this parliament since David Cameron has made a commitment not to touch the value of pensions for the wealthy.
Lamb has suggested it might be necessary to appoint an honest broker between the parties to try to secure a consensus.
Shadow work and pensions secretary Liam Byrne hinted at the possible move in an interview this week saying: “There’s always been a balance in the welfare state between universal benefits and targeted benefits, and I am afraid as part of Ed Balls’ zero-based spending review that balance has got to be looked at.”
Miliband’s aides were on Wednesday trying to show how One Nation Labour might have electoral appeal. They suggested voters had turned away from the last Labour government because an unidentifiable group of workers felt there was no route into employment for their children. They also felt immigration was making their life more difficult, and no one cared. They considered New Labour did not do enough to reassure this group of voters that people at the top would be expected to display responsibility.
Addressing this theme, Miliband told his conferenence: “One Nation is incredibly important to us as a country and us as a party. Old Labour is not going to answer the challenges we face because it can’t stand up for the whole country. But nor is New Labour, because it was too silent about the responsibilities of those at the top and too timid when it comes to the vested interests of our country.”
He added: “If you take what we have announced on vocational qualifications, on apprenticeships, or what we have said about immigration and some of the concerns we have overlooked it is understanding who we left behind as a party as well as understanding that we need to make sure responsibility goes right the way to the top.”
The remarks suggest Miliband recognises that he needs to win over many people who voted Conservative at the last election, and a focus on former Liberal Democrat voters will not be enough.
He also tried to portray Cameron as someone who is deliberately dividing the country, saying: “People are thinking in their hearts, actually who can really unite this country, who can really bring this country together?”
He added that when Cameron appears at next week’s Conservative conference in Birmingham, “you are not going to see a uniter, you are going to see a divider. You are going to see someone who is dividing Britain. The next general election will go to the person who can show that he can unite Britain, not divide it.”
Miliband also courted controversy with the rightwing press by saying he will attend a trade union-organised march against government cuts this month. The demonstration, labelled “A future that works”, is due to take place in central London on 20 October.
Asked by a union member at Labour’s annual conference in Manchester if he would join the protest, Miliband replied that he would “be there”.
Unions have criticised Labour for supporting a public sector pay freeze.
Miliband also tried to deal with an omission in his conference speech by speaking extensively on climate change, and called for aviation emissions to be brought into national carbon budgets.
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