James Forsyth

Ed Balls: Labour will include pensions in its welfare cap

Ed Balls: Labour will include pensions in its welfare cap
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Ed Balls has just told Andrew Neil on the Sunday Politics that Labour will include pensions in their welfare cap. This opens up a major dividing line with the Tories who have been clear that George Osborne will exclude pensions from his spending cap.

I suspect that Balls and Ed Miliband will now be badgered with questions about whether, if necessary, they’ll cut pensions — or not up-rate them — to meet the cap. Given the power of the grey vote in British politics (Labour estimates that one in every two voters in 2010 was over 55) they are going to come under massive pressure to rule this out. But, strikingly, Balls was not prepared to do this on  Sunday Politics. He even drew attention to the amount of welfare payments which go to the over-60s. Here's a clip:

listen to ‘Ed Balls opens possibility of his cutting pensions. BBC Daily Politics 9 June 2013’ on Audioboo

</p><p>(function() { var po = document.createElement("script"); po.type = "text/javascript"; po.async = true; po.src = "http://d15mj6e6qmt1na.cloudfront.net/assets/embed.js"; var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(po, s); })();</p><p></p><p></p><p>It’s also clear that Balls is not expecting the kind of steady recovery that the Treasury is. He said that any he hoped the economy would recover but that he feared that any recovery would be ‘really weak’. The below graph shows how that the OBR is factoring this in already:</p><p></p><p><img class="alignright size-full wp-image-8536031" alt="Screen-Shot-2013-06-09-at-13.44.47-554x413" src="http://blogs.spectator.co.uk/files/2013/06/Screen-Shot-2013-06-09-at-13.44.47-554x4131.png" width="520" height="388" />