The State Pension
The ‘triple lock’, which Conservatives introduced, protects pensioners by increasing your pension every year by the highest of earnings, inflation or a cash amount of 2.5%.
As a result pensions have gone up by £1,250 a year since 2010.
The triple lock will continue to 2020, as we promised at the last election, but we will then drop the cash element and pensions will go up by the highest of earnings or inflation.
That protects pensioners from the big real risk (inflation) and gives them the same increase as workers, if wages go up by more. And it prevents workers from paying too much for their parents’ pensions if there are zero or very low wage increases and very low inflation.
This policy was also the recommendation of our Parliamentary Work and Pensions Select Committee, chaired by Labour MP Frank Field, and including 4 other Labour MPs and an SNP MP, as well as myself and other Conservative MPs.
It is the right thing to do for fairness to pensioners and all generations – and far better than the state pension annual increases under Labour before 2010.
Winter Fuel Allowance
Currently every pensioner, including all higher rate tax payers, gets the £200 winter fuel allowance. It is absurd to hear Labour Shadow Chancellor John McDonnell (on almost £100,000 a year) say that this should be a benefit for everyone.
So our plan to give the Allowance only to pensioners who really need it is the right one. The question is therefore what’s the cut off point, and this will be consulted on later, but I am clear that the vast majority of not well off pensioners in Gloucester should still get the allowance – but not higher rate taxpayers.
No government has yet been able to solve the problem of social care because it’s very hard (and very expensive) to insure against.
Currently, if you need residential care, and don’t qualify for government provided help, all of your assets down to £23,250 must be used up before the state will help.
This is not fair, but there is a balance to be struck between what the state (i.e. all taxpayers) contribute and what families should contribute. Part of saving should be to look after ourselves, if needed, in later life.
So our plan means you can hand on assets worth £100,000 and no-one, or their spouse or partner, would have to leave their home during their lifetime.
That is over 4 times as much as now that can be passed on. It does mean that a very rich person in a very big house may have to pay a lot if their care requires it, but that is fairer than lots of other less well off people having to pay for them through taxation.
And it means the average family in Gloucester would probably (on an average house price of £280,000) pass on more than a third of the value of their house. In the worst case scenario (of needing decades of care) that still means the taxpayer would pay for the bulk of the cost, and we’re still going to consult on a cap too.
That seems to me reasonable, and a fairer arrangement than at present.
The alternative to our approach is continuing to give very rich pensioners winter fuel, or only being able to hand on £23,250 if you need expensive care, with some local authorities obliging you to sell your home while getting care. I don’t think either is fair.