POLITICS

Ed Balls Says Labour Would Axe Winter Fuel Payments For Wealthy Pensioners

03/06/2013 08:34 BST | Updated 03/06/2013 12:10 BST

The Labour Party has decided rich pensioners should no longer be given winter fuel allowances.

Shadow Chancellor Ed Balls will say support for better-off OAPs "can no longer be a priority" at a time of harsh public spending cuts.

He will hail the move to end universality as an example of the Opposition's willingness to show "iron discipline" if it takes power in 2015.

And he will urge Chancellor George Osborne to heed warnings about the UK's economic prospects and increase borrowing to boost growth.

winter fuel payments

The announcement is a gamble by Balls

The announcement on the winter fuel payments is seen as politically significant although it will not raise huge amounts of money.

Universal benefits for pensioners have become a key battleground, with David Cameron under pressure to abandon a pledge to protect them,.

Tory and Lib Dem colleagues believe they should be means-tested to protect other services from the £11.5 billion of further cuts for 2015/16 being sought by Chancellor George Osborne in a spending review this month.

Under Labour plans, the payments would be stripped from all pensioners with sufficient income to pay higher or top-rate income tax - around 600,000 individuals at present - saving £100 million a year.

Opposition leader Ed Miliband indicated recently that the payments were under review - although a party source insisted afterwards that he continued to believe universality was "part of the bedrock" of the welfare system.

Making a speech in London's Docklands, Balls will say: "With the Chancellor refusing to change course, Labour must start planning now for what will be a very tough inheritance in 2015.

"It will require us to govern in a very different way with much less money around. We will need an iron discipline and a relentless focus on our priorities.

"And this iron discipline on spending control must go alongside action to deliver a fairer approach to deficit reduction. And that will mean answering big and immediate questions for 2015 in our manifesto.

"When our NHS and social care system is under such pressure, can it really remain a priority to pay the winter fuel allowance - a vital support for middle and low income pensioners - to the richest 5% of pensioners, those with incomes high enough to pay the higher or top rates of tax?"