This was always a problem George Osborne would be unable to solve. As a result of this spending review, pensioners next year will receive £600m less in winter fuel payments.
Does this break the Tory pledge in the election? Not quite. When David Cameron made his read my lips campaign promise, he vowed to “keep what we inherit” on winter fuel payments, free bus passes and other benefits to pensioners.
Most people would have expected that to mean that he matched the same payout as Gordon Brown.
But the Treasury accounts are a funny thing. As I disclosed in August, Brown only booked in a payment of £2.1bn in 2011. The additional £600m was his Christmas bung, a festive gift to show how munificent a leader he was. It was a one-off that he re-announced every year.
So Osborne is technically protecting what he inherited: £2.1bn. To payout the same as Gordon Brown would have involved increasing borrowing — something that is pretty unjustifiable given the spending review we’ve been through.
That said, an 80-year-old watching the election debates probably didn’t expect Cameron to cut their total payments by up to £100. This was always an expensive pledge to make in the election campaign. It will be interesting to see whether it carries a political price too.
UPDATE: A DWP official has called to point out that the chancellor may still top-up payments for 2012 in the March Budget. I wonder if any cabinet ministers have any spare money lying around to fund the £600m bung?
Jim Pickard
Kiran Stacey