Britain’s retirees will not face any cutbacks to their free “pensioner perks” until at least a year after the next general election – despite demands for the wealthy elderly to start sharing the burden of austerity.
David Cameron intends to protect universal winter fuel payments, free TV licences, travel passes, eye tests and prescriptions until at least 2016.
His decision is likely to mean even bigger cuts to welfare or the public sector when the Government unveils its plans to cut a further £10bn from spending for the year 2015-16.
Pensioners paying the 40p or 50p rates of tax, with incomes of more than £44,000 a year, are costing £100m a year in winter fuel payments and £20m a year for free TV licences.
The Government also funds local councils to pay for free transport for the over-65s and waives charges for prescriptions and eye tests.
Mr Cameron’s aides were forced to make the announcement after an earlier bungled Downing Street briefing to reporters suggesting that ministers were considering cutting pensioner benefits from 2015.
Mr Cameron’s premature announcement limits George Osborne’s room for manoeuvre still further. Earlier this week the Prime Minister pledged no further cutbacks in defence equipment spending – alongside health, school education and international aid spending which are also protected.
George Osborne wants an agreement on £10bn of new savings by June this year. Ministers must agree a detailed budget for the 2015-16 financial year because it starts before the May 2015 general election.
Nick Clegg will argue against another squeeze on benefits for the poor so soon after the three-year cap on benefit rises was announced in the Chancellor’s Autumn Statement.
A senior Liberal Democrat source told The Independent: “If they [the Conservatives] do want to open up a debate about welfare savings, we would be more than happy to have one that starts with the sacred cow of benefits for millionaire pensioners.”