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Rich Retirees Should Pay Back State Benefits, U.K. Ministers Say

Rich Retirees Should Pay Back State Benefits, U.K. Ministers Say
Work and Pensions Secretary Iain Duncan Smith said the benefits, which include a winter fuel allowance, subsidized bus travel and free TV licenses, would not be cut and urged those who didn’t need them to return them. Photographer: EyesWideOpen/Getty Images

April 28 (Bloomberg) -- Wealthy retirees in the U.K. should repay the benefits they get from the state or give them to charity, two cabinet ministers said.

Work and Pensions Secretary Iain Duncan Smith said the benefits, which include a winter fuel allowance, subsidized bus travel and free TV licenses, would not be cut and urged those who didn’t need them to return them. Minister without portfolio and former Chancellor of the Exchequer Ken Clarke said they should give the money to charity.

“It is up to them, if they don’t want it, to hand it back,” Duncan Smith said in an interview with The Sunday Telegraph newspaper. There is “no indication of change” to the benefits, which are available to all retirees regardless of wealth, he said.

Prime Minister David Cameron pledged to protect the benefits at the 2010 general election after accusing his predecessor Gordon Brown of lying in leaflets claiming Cameron’s Conservative Party planned to cut them. The Conservative’s junior coalition partner Liberal Democrats say wealthy retirees should not receive the payments.

“I think we should grasp this nettle, but the Conservatives don’t want to,” Deputy Prime Minister and Liberal Democrat leader Nick Clegg told the BBC in a televised interview. “When money is tight you’ve got to have the right priorities in tough times. It’s right to ask very wealthy, maybe multi-millionaire pensioners to make sacrifices just as we’re asking families on much lower incomes.”

Clarke said there is no mechanism for the money to be paid back to the Treasury and suggested it could be given to charity.

“You can’t hand it back to the government -- I don’t think there’s a system for that,” Clarke told Sky News. “Every pensioner and retired person has to make up their own mind about whether they really need it and whether they’re going to give it to some worthwhile cause.”

The Conservatives trail the main opposition Labour Party by nine points, according to a YouGov Plc opinion poll for the Sunday Times. The online survey of 1,898 people conducted April 25-26 put Labour on 40 percent, the Conservatives on 31 percent and the Liberal Democrats and UKIP on 11 percent each. No margin for error was given.

To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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