Pensioner perks: Osborne and Cameron target grey vote

Chancellor aims to protect pensioners and hit young people on benefits and rich council tenants instead

Column LAST UPDATED AT 10:53 ON Mon 6 Jan 2014

GEORGE OSBORNE effectively laid out the Conservatives' general election “offer” to pensioners when he appeared on Radio 4's Today programme this morning ahead of a speech warning that 2014 will be a year of “hard truths” and that he is looking to cut a further £25 billion from state spending after 2015.

The Chancellor said he aims to protect controversial universal benefits for wealthy pensioners including free bus passes and heating allowances at the expense of housing benefit for those aged under 25. 

It amounts to a clear campaign to win back core Tory voters – the grey vote – from Ukip and it risks a split inside the Cabinet.

Osborne said: “We haven’t written our manifesto yet but if you were going to be looking for savings in welfare, pensioner benefits is not the place where I would first turn to. I would look at housing benefit for the under-25s.

“There are plenty of people listening to this programme who cannot afford to move out of their home, but there are people on benefits who can get housing benefit under the age of 25.”

Osborne and David Cameron are defying the wishes of Nick Clegg, the Lib Dem deputy PM, and Iain Duncan Smith, the Conservative Work and Pensions Secretary, who have been pressing inside the Cabinet for universal pensioner perks to be cut for wealthier pensioners in order to protect welfare spending elsewhere.

The Chancellor also hinted this morning that he favours keeping the ring fence around NHS spending, which some Tory right-wingers, led by former Defence Secretary Liam Fox, want to break.

Osborne was evidently seeking to clear up the confusion caused by Cameron when he appeared on the Andrew Marr Show yesterday.

The Prime Minister promised to extend until 2020 the “triple lock” protection for the state pension – to raise it in line with average wage rises, inflation or 2.5 per cent a year (whichever is the highest) - if the Tories win the 2015 election. But he refused to rule out cutting the perks to wealthier pensions after the next election. 

Downing Street said after the show that Cameron remained "personally committed" to his 2010 election pledge to keep perks for the elderly in place but it took Osborne to send a clearer signal that the pledge will likely be renewed in 2015. He said cutting free bus passes, cold weather payments and TV licences for the over-75s would save a “few tens of millions of pounds – it is not where you need to make the substantial cuts required".

And he added a warning to wealthy council house tenants: “There are people, for example, on incomes of £60,000 or £70,000, who can get council homes. I would look at that issue.”

High earners in council houses include Bob Crow, leader of the RMT rail union, who earns £145,000 a year and lives in a council house in north London. Crow said in November he had “no moral duty” to move out.

Many commentators will now argue that Osborne's wish to reduce the welfare budget is not just about balancing the books – it's driven by right-wing ideology. Kevin Maguire, associate editor of the Daily Mirror, has already tweeted: “Osborne's speech shows endless cuts to public services and help aren't driven by the deficit. Austerity is an article of ideological faith.”

Either way, Osborne and Cameron have fired the first salvo and staked out the battle ground for the 2015 election. The fact is that a majority of pensioners actually go to the polls on election day, while young people are apathetic about voting. The Tories are going all out for the grey vote.  ·