Fury at threat to means test state pension – how long have MPs been planning this? | Personal Finance | Finance
Last week, I highlighted a suggestion by chancellor Rachel Reeves’ newly appointed tax adviser Sir Edward Troup, that the state pension should be means tested. Earlier this month he told LBC: “If the public finances are in a bit of a state, perhaps wealthy pensioners should be giving up their full state pension.”
Sir Edward admitted that means testing pensioners would be hugely controversial but said a “debate needs to be had” and means testing “should be delivered”.
I originally thought this was his personal hobby horse but now I’m not so sure. The idea has clearly been kicking around Westminster for some time.
And it seems to have currency on the right as well as the left.
In fact, none other than right-wing Tory MP Suella Braverman called for exactly the same thing as Sir Edward, two months earlier.
In May, the former Home Secretary urged then PM Rishi Sunak to scrap the two-child benefit cap, which restricts Universal Credit and Child Tax Credit to the first two children born after April 6, 2017.
It was her suggestion for funding the move that surprised me.
Braveman said: “This money could be found by getting more out of work claimants off welfare and back into work, and perhaps introducing some form of means testing for pensioners.”
That’s a pretty loose phrase – “some form of means testing for pensioners”. It may have been completely off the cuff, who knows.
It certainly wouldn’t win the Tory party many votes, which Braverman might want to take into account should she become leader.
Something else has come to my attention.
On November 29 last year, during a debate on the government’s new Data Protection Bill, Labour MP Sir Stephen Timms, noted that Conservative party ministers had just “rushed an amendment through the Commons, allowing it to look into the bank account of everybody claiming state pension”.
This made Sir Stephen very suspicious, as he warned: “Their only reason was that it might be useful one day. The only change which could make it useful would be to means test the state pension.”
Sir Stephen Timms, who has been an MP since 1994, served as chief secretary to the Treasury from 2006 to 2007. So he knows how it thinks.
Now Labour has inherited the power to look into your bank account and means test the state pension if it chooses to do so.
I don’t want readers to worry overly, so I’ll say I can’t imagine Reeves introducing state pension means testing in the immediate future.
It would be an administrative nightmare and would trigger a furious response.
Express.co.uk reader no one important echoed the views of many, writing below my article: “After paying NI contributions for 49 years I AM entitled to the pension. If they [Labour] do try to do this they will have so many problems that they may never ever see power again.”
However, reader gudboy noted that means testing would “prove to be unrealistically difficult”.
“To increase a rate of tax on pensions is one thing but to take a pension away COMPLETELY from some pensioners just because they have additional pensions is morally wrong, probably totally illegal, and if attempted will certainly hasten the Labour Party’s demise.”
That’s my view too. Others who’ve looked into this issue take a more sceptical view.
Robert wrote to say: “Please do me and a few million others a favour, please pursue the issue of means testing state pension.”
He added: “We need clarity on this. Talk about pulling the rug out from under us at the last minute. Typical.”
Yet some readers are in favour of means testing, including one who lived in Australia for 30 years, where the state pension is means tested.
He wrote: “Overall the tests encourage people to be self sufficient, to build up resources through one’s working life, rather than depend on the government.”
I suspect a lot of MPs in Westminster would agree. So far, only Suella Braverman has shown her hand. But what were the Tories thinking in November?
And more importantly, what is Reeves thinking today?
