Ed Balls: Labour would cap state pension if it returned to power
Shadow chancellor sets challenge to George Osborne, who is due to announce a cap on the welfare bill this month
Ed Balls, the shadow Chancellor, has warned that an incoming Labour government would set a limit on its welfare budget that would include pensions, because pensioners also have to share the pain as the UK struggles to get its economy back on track.
In doing so, he set a challenge to the Chancellor George Osborne, who is due to announce a cap on the welfare bill this month, from which pensions are expected to be exempt, because the coalition government is wary of upsetting the over 60s, who have an exceptionally good record for turning out to vote at election time.
Mr Balls also appeared to have contradicted the Labour leader, Ed Miliband, whose staff had briefed journalists only days ago to say that Labour would protect the so-called ‘triple lock’, which guarantees that state pensions go up every year.
His remarks were part of an interview intended to demonstrate that Labour is ready to take hard decisions to get the economy in shape. Mr Balls promised that a Labour government “will spend the money which we inherit, no more.”
“I’ll have to be a Chancellor who says no. That’s how it’s going to be,” he told the BBC’s Sunday Politics programme. “Look across the whole welfare state and ask what are the drivers of expenditure. I think many people watching your programme will not realise that actually today the clear large bulk, most welfare spending is in fact going to people over 60. That is the truth. We should look across the piece.”
Mr Balls’s announcement set off a gleeful reaction from the Conservative side, and had Labour spin doctors moving into action to soften the impact of his words. The Tory Treasury feed announced on Twitter: “Ed Balls has revealed what Labour really mean when they talk about controlling the welfare bill - cutting the state pension.“
The Tory business minister Matthew Hancock, a close ally of George Osborne, added: “Balls admits that when Labour say they will cap benefits, what they mean is they will cap pensions of people who have worked hardtheir whole lives. We will cap benefits for those who want something for nothing.”
But Labour spin ministers emphasised that Mr Balls was not planning to scrap the ‘triple lock’, which guarantees that pensions rise annually in line with inflation, earnings, or by 2.5 per cent, whichever is the greatest. They said that the basic pension would continue to rise annually under Labour, while they looked at long term possibilities for cutting the cost, such as raising the retirement age.
A spokesman said: “Labour supports the triple lock on the state pension, but as Ed Balls said it would be perverse to exclude overall spending on pensioners and the impact of an ageing society from any sensible and long-term fiscal plan to monitor and control structural social security spending. That’s why we have supported increases in the retirement age as people live longer and why we have also said we would not pay the winter allowance to the richest 5 per cent.”
Wellcome Image Awards: The most striking images from the world of science, including breast cancer cells under chemical attack and a photographer’s own kidney stone
Missing Malaysia Airlines plane: 'All passengers' under investigation, police say
Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
Oscar Pistorius murder trial: Athlete repeatedly sick as court hears 'graphic details' of Reeva Steenkamp's post-mortem
How climate change helped Genghis Khan: Scientists believe a sudden period of warmer weather allowed the Mongols to invade with such success
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
- 1 Pakistan vs Paul Smith: Sandal-wearers bemused by famed British designer's attempts to sell traditional Peshawari chappal-style shoes for the distinctly untraditional sum of £300
- 2 Family forced to flee home after discovering nest of potentially deadly spiders in bananas
- 3 Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 4 Russell Crowe's Noah banned in three Arab countries before worldwide premiere
- 5 Bob Crow death: 'Admired by his members, feared by employers' - Tributes pour in for RMT union leader and 'working class hero' Bob Crow
£30000 - £50000 per annum + Very Competitive Salary: Austen Lloyd: Private Cli...
£30000 - £35000 per annum + Very Competitive Salary: Austen Lloyd: Residential...
£1000 per month: Inspiring Interns: The company works with Tier 1 FTSE 100 Ban...
VOLUNTARY ONLY - EXPENSES REIMBURSED : Reach Volunteering: Fantastic opportuni...