UK Politics

Benefits spending under review, says Treasury

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The government is reviewing the amount it spends on universal welfare payments such as child benefit and the winter fuel allowance.

Such payments - dubbed "middle class" benefits because they are available to all including the better-off, who might not need them - could be frozen.

A source said they were "in the mix" ahead of October's spending review.

Deputy PM Nick Clegg, speaking as the coalition marked 100 days in power, said no final decisions had been taken.

Another option that could be open to the government is to pay the benefits to all, whatever their income, but to "taper" them so that the poorest in society get the most money.

But government sources have indicated that "means testing" or ending the universality of such benefits will not happen.

Ministers are already committed to raising the age at which the winter fuel allowance can be claimed from 60 to 65 by 2020.

However, the government has not ruled out bringing this change forward.

'Speculation'

Newspaper reports suggest the government will cut back universal payments such as the fuel allowance and child benefit, as part of a £13bn reduction to pay for radical welfare changes proposed by Work and Pensions Secretary Iain Duncan Smith.

But Deputy Prime Minister Nick Clegg dismissed the idea as "speculation" and refused to be drawn on the coalition's plans.

He told BBC Radio 4's Today programme: "We are engaged as a government in a collective effort to get this right to both make savings to the welfare bill and to create a simpler, fairer welfare system that, above all, gets people into work."

He added: "Sometimes I wish we could get the comprehensive spending round done in a day so that we could deal with all of the fears that are raised.

"It's the middle of August. This is not going to be announced until October. And final decisions will only be taken much nearer the time.

"I think it actually increases anxieties in having this constant running commentary on decisions that haven't been taken or might not be taken at all."

The Times and The Daily Telegraph both report that the winter fuel payment could be reduced by as much as £100 in the government's comprehensive spending review this October.

Currently anyone over 60 is eligible, with households getting £250. Pensioners aged over 80 can claim £400 per household.

The scheme costs taxpayers about £2.7bn.

'Shocking betrayal'

For Labour, shadow work and pensions secretary Yvette Cooper said: "Winter fuel payments help many pensioners across the country. David Cameron has promised time and again that the Tories would protect them.

"But today we hear the work and pensions secretary is planning to cut this support that so many pensioners depend on. This is a shocking betrayal of pensioners."

Child benefit, paid at the rate of £20.30 a week for the first child and £13.40 for other children, costs about £4.3bn a year.

A Department for Work and Pensions spokeswoman said there would be no "running commentary" on the coalition's benefits plans.

She said: "The qualifying age for winter fuel payments for men and women is rising in line with the increase in women's state pension age.

"This is a gradual process. Under the current system women's state pension age is rising from 60 to 65 between April 2010 and April 2020. We have launched a call for evidence on raising state pension age to 66 and will publish our response in the autumn."

No decisions had yet been made ahead of the autumn's spending review and subsequent white paper on welfare reform, she added.

The coalition agreement pledges to "protect key benefits for older people such as the winter fuel payment", but does not rule out reform.

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