by Rab Bruce’s Spider

Mastodon: @RabBrucesSpider1@Mastodon.Scot

Twitter: @RabBrucesSpider

I posted on social media about the comments made by Tory MP John Glen who is calling for some sort of means testing on Pensioner’s Winter Fuel payments. Mr Glen argues, with some justification, that some pensioners do not need this extra cash, and he would rather see it used to help alleviate child poverty.

Now, at first glance, many people will agree with his sentiment. However, while I’ve not been able to check Mr Glen’s voting record on child poverty, I would respectfully point out that it is the Tories themselves who have massively increased poverty at all levels, but particularly among children. Perhaps he now feels they should do something about this, but I’d say it’s a bit late for that. In any event, the Chancellor knows full well that children don’t vote, so no Tory has much incentive to take money away from the people most likely to vote for them, then hand it to people who have no vote.

As for using money paid to pensioners, even Mr Glen admits that it would be difficult to decide which pensioners should miss out by virtue of being well off. HMRC don’t carry records on household wealth, so deciding who should miss out could be problematic. Besides, as has been demonstrated by things like free NHS prescriptions in Scotland and the payments made to the self-employed during Covid, it is usually cheaper to provide a universal benefit than it is to introduce and maintain a system of means testing.

And why can’t the Tories do both things? Why not alleviate poverty while also paying pensioners a bit extra to help with the enormous energy bills they face? We keep hearing that there is no money, but this mindset, largely driven by outdated views in the money markets, doesn’t seem to apply when the Bank of England needs to create billions of pounds in order to bail out banks. Modern Monetary Theory says that, if you have a magic money tree like, say, a central bank, then you can spend as much as you like. Taxation should then be used to rein in the inflationary pressures created by that extra cash. Taxing the wealthiest in society would certainly help that, but again, no Tory Chancellor is likely to do that. And let us not forget that the vast majority of people who receive either the Winter Fuel payment or who might benefit from additional funds to alleviate child poverty, are actually going to spend that money. They aren’t going to hoard it in offshore trust funds. So pumping extra money into the economy to help both pensioners and children will actually stimulate spending and help boost the economy.

As for those wealthy pensioners who don’t need the money, they are under no obligation to do so. They can always donate it to their local food bank or to a children’s charity. But how many of them will actually do that? Not many, I’d guess.