Rachel Reeves has announced that winter fuel payments will only be paid to those on Pension Credit.nsion Credit

Doodledog Jeremy Hunt has written to the Cabinet Office with his concerns regarding Ms Reeves statement to the house.

(I have posted the letter in a separate thread)

NotSpaghetti

Doodledog
One of the problems is that
those who haven't made provision
may genuinely have spent a lifetime with poor wages - in a hand-to-mouth existence. They may have been carers for parents, grandparents, aged aunts etc.
They may be pillars of the community.

You can't penalise them in "old age" too just because they weren't privileged enough to be able to save.

It is so difficult to word things on here so that someone doesn't pick up on the phrasing.

Of course I know that not everyone has been able to save. Which is why I am not in a million years saying that anyone should be left out of benefits, whether they have contributed or not.

What I am saying, however, is that where people (who may be actual saints, if that really matters) have saved, or worked extra hours to put into a pension (or to have a 'rainy day fund', a summerhouse, money to give their grandchildren when they reach 21 or buy a life-sized model of George Clooney if that's their dream purchase) they shouldn't have their rights to pensions or benefits taken away because someone else thinks they 'don't need' it as a result.

Making provision/saving/call it what you will should be something that people can all do, on however small a scale, and spend it how they like. As it is, as long as there are means-tested benefits many people are kept on the breadline by having benefits refused because they have 'too much' coming in, or in the bank.

I want to extend universal benefits, not limit them.

Doodledog

I agree that when those who won't miss the money say so it must be hard to hear for those who will miss it. I feel the same when people talk about how well they managed as young mothers, or how they know people who are able to work but claim disability benefits. In all cases it is insensitive and proves nothing, as experiences are so different and norms change with the times.

People can be very uncaring about others. I remember when the Tories (MPs, not voters) cheered when they won a motion to deny nurses a pay rise - very unedifying. Yet now Hunt is suggesting that Rachel Reeves is lying about the £20billion and criticising her for taking money from pensioners. Luckily, Starmer has promised to ensure much more openness about finances, so the truth will come out and I hope that Hunt apologises (along with others who have made such accusations) , although I think it's unlikely.

HattieTopper I agree that it's only worth saving if you can afford to make a huge difference. If you are a small saver who just wants a rainy day fund it can seem pointless. Means-testing is invidious and I will never support it.

Excellent post.

And I learned a new word. I'll forget, but thank you.

I understood that the Dilnot recommendation hasn’t been kicked down the road, but killed off completely. It will never be brought to fruition now.

Rachel Reeves has scrapped the social care cap proposed by Dilnot. But Wes Streeting said on 16 June during the election campaign that he wanted 'to give the care sector “certainty” that the cap would be rolled out as planned from October 2025'. Pretty clearly his statement has been proved unreliable to say the least. Dilnot's recommendations have been kicked down the road several times and this is another one.

Has Ms Reeves volunteered to give up her winter fuel allowance? I was just informed they get over 2k ,hardly fair is it ? MP,s looking out for no one but themselves!

What if you thought you had " made provision" and your life changed dramtically, through no fault of your own?

Rosie51

Declaring something not a problem because it isn't a problem to you personally is the very epitome of privilege. I'm not complaining, I'll manage to heat my home I have options to cut back elsewhere, but I can't casually write off those pensioners who will be severely affected as "there's always some who are caught by the cutoff point" I hope we have an exceptionally mild winter or else pensioner deaths attributable to cold homes could mount.

Well said.

And yes, Doodledog it is indeed confusing but as you say,
it should be seen in the context of the Autumn budget when we've seen that.

I hope the Autumn budget brings bold and fair changes.
🤞

Doodledog
One of the problems is that
those who haven't made provision
may genuinely have spent a lifetime with poor wages - in a hand-to-mouth existence. They may have been carers for parents, grandparents, aged aunts etc.
They may be pillars of the community.

You can't penalise them in "old age" too just because they weren't privileged enough to be able to save.

Oh dear Peartree- " pearl clutchers" invoked again, and " get a life"?
Hardly the reasoned debate we would hope for amongst functioning adults.

Thank you for that MissAdventure. Our posts crossed by seconds.

That “up to” is very important because for “younger” pensioners whose contribution records straddle 6 April 2016, their SP entitlement may comprise mostly of pension calculated at the basic rate rather than the new rate. Mine does. I have five years that are calculated at new state pension rate for 2016 to 2021 and thirty at the old state pension rate. It’s complicated because of the deductions that have to made for having been contracted-out of the additional state pension scheme. The other nine years I paid don’t count.

Thank you too to Maizie D for your analysis of the national debt. Secondary bond market, yes but also. …

… at the risk of starting another argument here, I’d get rid of Premium Bonds.

NS&I are paying out around 5.5 billion interest a year in a very unevenly distributed prize fund. The vast majority of small bondholders will never win a bean. Most of the prize money goes to those who can afford to invest £50,000 with little or no return. Even with median average luck, you get an inferior rate of return than with a bank albeit not necessarily tax free unless you build an ISA stack. Very few people are ever going to win a substantial prize.

Removing the two child limit on universal credit - estimated cost 3.5 billion. Retaining WFA 1.5 billion. Total 5 billion. Very simplistic I know but that’s how I see things. Help poor children and pensioners who are cold by ending the prize fund. Repay the 120 billion invested in PB releasing private funds that could be invested elsewhere to help stimulate the economy.

I suggest you take your own advice Peartree.

David49

I wonder if she meant to misquote Keynes, who said (to paraphrase) If we can do it, we can afford it

That depends on the state of the economy, if the investment yields a cash return then yes do it, the UK has been investing far too much in projects/services that don’t yield any return even in the long term.
Because there has not been a return borrowing has had to increase to balance the books

You beat me to it with the Keynes quote, but it took me quite a time to write my post.

We can 'Borrow' from the Bank of England. We've done it three times already this century, first to rescue the banks in the Global financial crisis, secondly to prop up the pound after the Brexit vote, and thirdly to cover the Covid pandemic spending. In no instance did this adversely affect the value of sterling, nor was it inflationary. The post pandemic inflation was caused by global supply problems caused by the war in Ukraine.

Admittedly, because of where the money was targeted it caused inflation of bond and property prices post the GFC, but in the pandemic it kept the economy moving, even though a great deal trickled up to friends and donors of the tory party. This was wrong and should have been better controlled.

But if the money is targeted towards government investment in infrastructure, research and development in new technologies, and relieving poverty there would be far better returns to the government via taxation, and growth in the economy.

Message deleted by Gransnet. Here's a link to our Talk guidelines.

I watched Reeves giving the speech. She repeated said: If we cannot afford it, we cannot do it. But there are a lot of things that the government cannot afford else we wouldn’t have a national debt sitting at around 2.7 trillion.

Even Jonathon Portes, who is a far from heterodox economists points out that this is an inversion of Keynes well known dictum 'if we can do it we can afford it'. It was this thinking that gave us the NHS and nationalisation post WW2. And it was Keynesian economics that gave us growth and diminishing inequality up to the 1970s.

As to the 'national debt', this article, from a left wing site and I don't necessarily agree with some of its conclusions, does make an effort to find out what constitutes the national debt.
According to OBR figures, of the >£2 trillion owed, £371 billion (or around a quarter) is owed to the Bank of England (BoE). This is about the same as the national deficit.

The BoE is owned by the nation, so in effect this amount is owed by the nation to the nation. There is no imperative for it to be 'repaid'.

The Official Monetary and Financial Institutions Forum describes the situation as the BoE “nearly financing the deficit.” In addition, £172 billion is owed to the UK’s state bank, National Savings and Investment. So, we owe around one-third the debt to ourselves..

Do you want the government to repay your premium bond holdings or any money you have in an NSI account?

Much of the remaining two-thirds of the national debt is held by private gilt buyers.

Gilt buyers

It turns out that after the UK, Belgium held £197bn-worth of British government debt, followed by Luxembourg (£17 billion), Spain (£440 million), Germany (£289 million), and the USA (£23 million). After that, there was a drop off (e.g., UAE £3 million, Ireland £2.3 million).

So about another third. We're not exactly in hock to the rest of the world...

And the remaining third?

In response to FOI requests the Debt Management Office basically refuse to say

TLE asked the DMO “which companies (e.g., pension funds, asset managers) and entities (including corporations and individual investors), both legal and beneficial, hold UK gilts.” The DMO responded: “The DMO holds information on registered legal holders of gilts, but not on underlying beneficial holders.” So, who are the registered legal holders? The DMO further stated: “The gilts register is not a publicly available document, and corporate and individual holders therefore have a reasonable expectation that details of their holdings will not be disclosed”–even when public money is servicing their debts.

But:

The BBC says that the “buyers of these bonds, or ‘gilts’, are mainly financial institutions, like pension funds, investment funds, banks and insurance companies.

These institutions hold gilts (government bonds) because they are safe investments with a guaranteed return. The government, as a sovereign currency issuer will always pay the interest and principle. So, without those holdings your private pensions would be far less safe, because all other 'investments' carry risk.

Of course, this explanation doesn't account for the secondary bond market, which is basically a speculative vehicle for bond holders to maximise their profits from bond sales. These bondholders won't be contributing much to the domestic economy because they are, in the main, already wealthy and the wealthy have a low propensity to spend in the domestic market.

www.thelondoneconomic.com/business-economics/who-owns-our-national-debt-its-a-secret-287907/

This is one fairly reasonable analysis of the national debt. It does, in fact, comprise individuals and institutions savings and investment. Which bit do you want to be paid back?

It could be said that we could do without the speculators in the secondary bond market and just pay more government spending directly via the Bank of England.

Thank you GrannyGravy.
Certainly not in the spirit of Gransnet..

I wonder if she meant to misquote Keynes, who said (to paraphrase) If we can do it, we can afford it

That depends on the state of the economy, if the investment yields a cash return then yes do it, the UK has been investing far too much in projects/services that don’t yield any return even in the long term.
Because there has not been a return borrowing has had to increase to balance the books

Post references deleted post Talk guidelines.

I agree that when those who won't miss the money say so it must be hard to hear for those who will miss it. I feel the same when people talk about how well they managed as young mothers, or how they know people who are able to work but claim disability benefits. In all cases it is insensitive and proves nothing, as experiences are so different and norms change with the times.

People can be very uncaring about others. I remember when the Tories (MPs, not voters) cheered when they won a motion to deny nurses a pay rise - very unedifying. Yet now Hunt is suggesting that Rachel Reeves is lying about the £20billion and criticising her for taking money from pensioners. Luckily, Starmer has promised to ensure much more openness about finances, so the truth will come out and I hope that Hunt apologises (along with others who have made such accusations) , although I think it's unlikely.

HattieTopper I agree that it's only worth saving if you can afford to make a huge difference. If you are a small saver who just wants a rainy day fund it can seem pointless. Means-testing is invidious and I will never support it.

As regards the spending hole, it was calculated by the treasury on request - and announced - before pay rises
Casdon's reference above shows it quite clearly.

I watched Reeves giving the speech. She repeated said: If we cannot afford it, we cannot do it

I wonder if she meant to misquote Keynes, who said (to paraphrase) If we can do it, we can afford it

MissAdventure

Increases to the new State Pension
You can now get up to £221.20 per week depending on the National Insurance contributions you made during your working years.

Increases to the old State Pension
The full State Pension under the old rules is now £169.50 per week for people with at least 30 years of NI contributions.

Increases to Pension Credit
Guarantee Credit can now top up your income to at least £218.15 per week for single people and £332.95 for couples.

Savings Credit is now up to £17.01 extra per week for single people or £19.04 extra per week for couples.

The above is correct but without receiving benefits, the basic old state pension is only £169.50 and if you cannot claim benefits because you are receiving a small private pension which takes you slightly above the threshold for claiming benefits, then the WFA would be a godsend. I had 45 years of contributions from being 15 years of age to 60 years of age. I just wish I was not receiving a small private pension because I would be getting everything going.

It does not pay to save anymore. If I had my time again, I would put my money in a tin box under the floorboards and claim every benefit going. There are no medals for being frugal and saving money for your retirement because the government take it away from you.

I am so very bitter about this. The government only take care of people that do not take care of themselves.

Also I do not have many savings as I have had to pay out for new roofing for my home, garage roofing and porch roofing as the gales a few years ago ripped everything off and even though I had top knotch home insurance they refused to pay out because they said it was wear and tear so once again robbed by the system. I need what is left in case of emergencies.

Indeed Sycamore123! Thank you for your empathy. I am one of them and I live in Scotland where it is much colder (than England) in the wintertime. It will be a huge blow to us if Scotland can't find the funding to keep the cold weather payment in place. We cut heating back as much as we could last winter and that was difficult enough. To find a way to cut it even more is unthinkable, although we will have to especially as fuel prices are said to be going up again on top of this!

Smileless2012

According to Hunt, 10 billion of the 20 billion black hole is the cost of the announced pay rises in the public sector which she has just made .

This.