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| Labour will axe rich older people's fuel payments - Ed Balls | |
| (35 minutes later) | |
| Labour would cut winter fuel payments for the UK's richest older people if they won the next general election, Ed Balls is due to say. | |
| It would currently affect about 600,000 people over 61 who pay higher and top income tax rates - saving about £100m. | It would currently affect about 600,000 people over 61 who pay higher and top income tax rates - saving about £100m. |
| But one pensioners' pressure group said it would undermine the principle that those who paid into the system were entitled to something in return. | But one pensioners' pressure group said it would undermine the principle that those who paid into the system were entitled to something in return. |
| The shadow chancellor will also promise an "iron discipline on spending". | The shadow chancellor will also promise an "iron discipline on spending". |
| Mr Balls is due to tell an audience at Thomson Reuters headquarters in London that Chancellor George Osborne's economic policies have "failed catastrophically" on growth, jobs and deficit reduction. | Mr Balls is due to tell an audience at Thomson Reuters headquarters in London that Chancellor George Osborne's economic policies have "failed catastrophically" on growth, jobs and deficit reduction. |
| 'Symbolic' | 'Symbolic' |
| He will say the policies will leave a future Labour government with "a very difficult inheritance", and will promise "tough deficit reduction plan", coupled with more action to strengthen the economy. | He will say the policies will leave a future Labour government with "a very difficult inheritance", and will promise "tough deficit reduction plan", coupled with more action to strengthen the economy. |
| "The situation we will inherit will require a very different kind of Labour government to those which have gone before," he is due to say. | "The situation we will inherit will require a very different kind of Labour government to those which have gone before," he is due to say. |
| "We will inherit a substantial deficit. We will have to govern with much less money around. We will need to show an iron discipline. | "We will inherit a substantial deficit. We will have to govern with much less money around. We will need to show an iron discipline. |
| "This is the hard reality. The last Labour government was able to plan its 1997 manifesto on the basis of rising departmental spending in the first years after the election. The next Labour government will have to plan on the basis of falling departmental spending." | "This is the hard reality. The last Labour government was able to plan its 1997 manifesto on the basis of rising departmental spending in the first years after the election. The next Labour government will have to plan on the basis of falling departmental spending." |
| Mr Balls will also urge the government to heed the advice of the International Monetary Fund (IMF) which says the UK should increase infrastructure spending in the near term to boost growth. | Mr Balls will also urge the government to heed the advice of the International Monetary Fund (IMF) which says the UK should increase infrastructure spending in the near term to boost growth. |
| The BBC's political editor Nick Robinson says that although the saving from the winter fuel allowance pledge is small, it is meant as a symbol of his acceptance that day to day Whitehall spending will continue to fall under Labour. | The BBC's political editor Nick Robinson says that although the saving from the winter fuel allowance pledge is small, it is meant as a symbol of his acceptance that day to day Whitehall spending will continue to fall under Labour. |
| The winter fuel allowance has proved a controversial measure because it is paid regardless of income. | The winter fuel allowance has proved a controversial measure because it is paid regardless of income. |
| Prime Minister David Cameron pledged during the last general election campaign not to cut welfare measures directed at pensioners. | Prime Minister David Cameron pledged during the last general election campaign not to cut welfare measures directed at pensioners. |
| But the Conservatives have come under pressure from their Liberal Democrat coalition partners, who want to see benefits for wealthy older people addressed before deeper cuts to the wider welfare budget can be considered. | But the Conservatives have come under pressure from their Liberal Democrat coalition partners, who want to see benefits for wealthy older people addressed before deeper cuts to the wider welfare budget can be considered. |
| In April, Work and Pensions Secretary Iain Duncan Smith suggested that those who did not need the extra cash should consider returning the benefit. | In April, Work and Pensions Secretary Iain Duncan Smith suggested that those who did not need the extra cash should consider returning the benefit. |
| But he stressed that it should be their own choice and other government figures admitted there was no clear mechanism for allowing benefits to be returned. | But he stressed that it should be their own choice and other government figures admitted there was no clear mechanism for allowing benefits to be returned. |
| A Treasury source told the BBC the pledge was "utterly meaningless" and would save just 0.5% of the welfare budget. | A Treasury source told the BBC the pledge was "utterly meaningless" and would save just 0.5% of the welfare budget. |
| "Ed Balls has just confirmed he wants to borrow and spend even more now - exactly what got us into this mess in the first place," the source said. | "Ed Balls has just confirmed he wants to borrow and spend even more now - exactly what got us into this mess in the first place," the source said. |
| Benefits shake-up | Benefits shake-up |
| Dot Gibson, from the National Pensioners' Convention, criticised Labour's plan: "Why don't they just tax these people if they want money from them? | Dot Gibson, from the National Pensioners' Convention, criticised Labour's plan: "Why don't they just tax these people if they want money from them? |
| "If they don't want their fuel allowance they can give it back. But the fact is that as soon as you start undermining the whole system of people paying in during their working lives and being entitled to the things they pay in for, you undermine everybody." | "If they don't want their fuel allowance they can give it back. But the fact is that as soon as you start undermining the whole system of people paying in during their working lives and being entitled to the things they pay in for, you undermine everybody." |
| Welfare spending accounts for almost a third of annual government spending, making it a focus of the government's austerity plans. | Welfare spending accounts for almost a third of annual government spending, making it a focus of the government's austerity plans. |
| Although universal benefits based on age have been left alone, other benefits, such as child benefit have been reformed to reduce the amount of money being paid to richer families. | |
| And Mr Duncan Smith has initiated one of the biggest shake-ups of the benefits system in decades. | And Mr Duncan Smith has initiated one of the biggest shake-ups of the benefits system in decades. |
| That includes the introduction of universal credit and benefit caps designed to encourage more people on benefits to return to work. | That includes the introduction of universal credit and benefit caps designed to encourage more people on benefits to return to work. |