Is Suella About to Cross the Floor?

Bizarre Socialist intervention from supposed standard-bearer of the Tory Right

I imagine quite a lot of spluttering of cornflakes on Sunday morning when readers of the Sunday Telegraph came across Suella Braverman’s extraordinary article. It certainly ruined my day.

It started innocently enough, advocating reform of the welfare system in order to encourage more people into work. Focusing on the two-child limit for child benefit, she lamented the unfairness of a policy that, she argued, increased child poverty. So what she was proposing was not so much a reform of the current welfare state as… an extension of it. Acknowledging that this would come at a £2.5bn cost to the Exchequer, she offered some creative ways of funding it:

“Many wealthy pensioners have massive assets tied up in housing and pensions. Means testing the benefits for the wealthy and retired at the top of the wealth scale will go a long way to supporting those who need it at the bottom.”

It was at this point, I suspect, that breakfast tables up and down the country were pebble-dashed with half-chewed cornflakes. My reaction? A full throated “WTF?” There is so much wrong with her suggeston that I hardly know where to begin.

Let’s begin with the fact of all these selfish wealthy pensioners with money tied up in housing. These are already being targeted for revaluation of council tax. In Wales, Labour is already using satellite imagery to use large gardens and property sizes as a means of rebanding. Keir Starmer’s party has just declined to rule out doing the same in government. Elsewhere, the Telegraph has pointed out that:

“Two fifths of homeowners aged over 65 live in a home that is larger than they need, meaning they are locking 2.6 million homes out of the market that could otherwise be purchased by young families and first-time buyers.”

There are a few issues with the country using all these selfish wealthy pensioners as an ATM:

• For one thing, the increased value of their house is in no small part a by-product of the housing crisis so why penalise them for government failure?

• Living in a house that has increased in value does not mean they are awash with cash. Frequently, pensioners are asset rich but cash poor due to increased council tax, energy prices and income tax (see below).

• Pensioners could of course downsize and “unlock” all their spare rooms but some might quite understandably hesitate to pay a six-figure sum in the form of stamp duty on a smaller property. Only for the government to splaff it up against the wall.

• It should also be pointed out that these wealthy pensioners paid for their properties out of taxed income.

But it wasn’t merely the homes of wealthy pensioners that Suella had her eyes on. It was the “massive assets” tied up in their pensions. Among the wealth drains that pensioners have had to endure are:

• Stealth taxes in the form of frozen tax thresholders resulting in many paying higher rate tax

• RPI having been cancelled as a measure of inflation from 2030 by Rishi Sunak as Chancellor. For those pensioners on final salary schemes that increase defined benefits by RPI, this little-noticed wheeze could cost a six-figure sum over their lifetime

• The much trumpeted reductions in National Insurance that do not benefit those on pensions.

The supposedly wealthy pensioners that Suella speaks of have often made income tax and NI contributions over decades and watched the state pension entitlement dates move out. Many will have, not unfairly, made retirement decisions based upon a forecast state pension component of their income.

If even Suella is coming up with this sort of Socialist rubbish, what can we expect a Labour government to do to pensioners with spare bedrooms? Billeting channel migrants on us seems like a dystopian fantasy but has, I’m told, been suggested by politicians in Germany.

At this point, one might observe a touch of catastrophising. However, I believe this article tells us just how seriously close we are to disaster. Were means testing of state pensions to be brought in by a government of any colour, I would come to the reluctant conclusion that Britain had finally turned into a colder version of Cuba. This would indeed propel me to sell up - not to downsize but to turn my back on the country and find a home elsewhere. Perhaps Argentina would have me?