By Lindsay Ash
FOLLOWING the last election, the Labour party did something fairly unthinkable for a party purporting to represent the more vulnerable sections of society: they cut the winter fuel allowance for pensioners. This caused outrage partly because it hadn’t figured in their recent manifesto (one can only guess why and I imagine that suggestion would be fairly accurate) and partly, aided by the media, because it conjured up images of impoverished elderly people huddled round a fire in the only room they could afford to heat while surviving by eating Whiskas cat food. This begs two questions: were they right to do it?
And were all these people desperately struggling? In my view they were right to address the issue, but did so wrongly.
Why did it need addressing? Because while most would agree with the sentiment that those in real need should be looked after, if you are a pensioner on a substantial pension why should the state provide an emergency benefit you do not urgently need? We saw this in Jersey of course when a generous local benefactor gave away money at Christmas in the form of food vouchers to pensioners; however, when one woman wrote to thank him and said she had given the voucher to her gardener, he realised a rethink was in order and consulted with the powers that be to ensure that the funds were reaching those who really needed them – quite right.
There is still this image of pensioners being impoverished people living on a pittance who fought a war so that we could all enjoy the freedoms we do now. While of course that was a generalisation, there was a very real truth in that view and we still owe that debt to those men and women who brought us through those times. However, the current pensioners are not those people. In fact, if we continue to generalise, they came through the 60s with sex, drugs and music gigs (yes sorry, Millennials and Gen Z people, you didn’t invent these things – your great-grandparents did); they then spent a lot of time on strike in the 70s, or sleeping on the night shift at the Ford Motor Company and brought their children up according to Dr Spock (that’s the child expert, not the bloke off Star Trek. Although with all those drugs, who knows…) and sowed much of what they dislike today. To generalise again (apologies, there’s more generalisation going on here than in a South American banana republic…) we have the new retirees, of course, who came through the Thatcher years, did work pretty hard but got the rewards, were able to buy their own property and now sit fairly comfortably.
So, having taken pensioners pretty firmly out of their Spitfires and Anderson shelters and into their “flowers in their hair”, “everybody out” or “loads-a-money” brackets, I am now going to stand up for some in Jersey.
We have recently heard a great deal in the press about pensioners paying tax on their state pensions. They contend that they have already paid tax in this respect. Firstly, if your only source of income is a state pension, you do not pay any income tax on it, as it’s under the tax threshold; secondly, the social security contributions cover far more than merely pensions, such as health, sickness etc, so to claim you’ve already paid tax on them is not technically correct.
So, Lash, you are not in favour of giving pensioners further tax concessions other than the normal threshold?
Well, no, actually. I am in favour. Not of hardship payments; as I said previously, they should be the preserve of the genuine strugglers, and also not for the erroneous arguments put forward by a vocal few. There should be change, however, in the interests of fairness – and I’ll tell you why “you lucky people” (Tommy Trinder©).
I had several conversations when I went round at the last election that stuck with me, and they were on the following lines: “We have always both worked hard, saved money, bought our house; we never did skiing trips or bought new cars and now we look round at Fred Le Blogs and others who just spent all their money, never saved anything, and now are given housing, money to spend above the pension because they never paid their stamp half the time… it’s not fair, is it?”
My answer was “no, it’s not fair, but we are talking elderly people here. What’s the alternative? I am sure we both agree that we wouldn’t want a situation where they are forced to beg on the streets.”
In fairness, they swiftly agreed that there was little alternative. There is, however, something that can be done to reward people who have worked hard and done things correctly and now find themselves hit by an ever-rising cost of living. What form that takes I am not sure. One easy solution may be to provide pensioners with a higher tax threshold and that itself may be limited to those collecting under, say, £50,000 a year. Who knows? But it’s a debate that needs to take place and it’s about time that those who have done the right thing are rewarded and not merely used to fund those who haven’t.
Lindsay Ash was Deputy for St Clement between 2018 and 2022, serving as Assistant Treasury and Home Affairs Minister under Chief Minister John Le Fondré. He worked in the City of London for 15 years as a futures broker before moving to Jersey and working in the Island’s finance industry from 2000. Feedback welcome on Twitter
@Getonthelash2
