This week, 17.5 million people on various benefits including the state pension and disability living allowance will receive a £10 Christmas bonus. It’s about time though, that Keir Starmer played Scrooge and finally abolished the bonus altogether. For unlike their Dickensian forebears, poor pensioners this Christmas won’t be going without food or warmth. In fact, they have more than enough of both.
When the Christmas bonus was introduced by the Tory minister Keith Joseph over 50 years ago, the basic argument was that pensioners needed the money to cope with that year’s soaring inflation of 7.2 per cent. Although believing £10 did not go far enough, the Labour politician Barbara Castle supported it, remarking that ‘many old-age pensioners and others this winter will be desperate – desperate for food, desperate for clothing and, above all, desperate for warmth’.
In 1972, when 42 per cent of pensioners lived in poverty, the argument for a Christmas bonus might have worked. Today though, with pensioner poverty at just 17 per cent, it looks to be dubious at best – especially when we consider that poverty here simply means an annual couple’s income of roughly £17,000 or less.
It’s about time that Starmer played Scrooge and finally abolished the bonus altogether
When we look at the spending of the poorest 20 per cent of pensioners, we find that much of it is on leisure. According to the Office for National Statistics, this cohort spends 18 per cent of their disposable income on recreation, culture, restaurants, hotels, alcohol and tobacco – about £2,400 a year. As such, their needs today could already be met out of their own pocket instead of the taxpayers’. If they want to give their grandchildren a present or money on Christmas Day, they shouldn’t need the festive bonus: they could simply go without two pints of beer instead. Politicians who argue that pensioners today really need the bonus are simply play-acting – they’re too afraid to say boo to a goose, let alone to the pensioners hissing over their stash of state benefits.
Some people will say it’s not so much need which warrants the bonus but the cash flow problems people have over the festive period. This is a very poor argument because payday loans exist which more than cover any issues people might have already.
And anyway, is it fair for a poor pensioner to get the state to forcefully take £10 out of the wallet of the rich simply so she can stick it in a card to her grandson, all because she didn’t have the foresight to make the required saving?
I suspect most pensioners will still be against the Christmas bonus being abolished. If they claim it on the basis of need and cash flow issues, would not the same reasoning warrant a £10 subsidy for Muslims for Eid or Jews for Passover? Obviously, it would. Yet I just can’t imagine many people getting behind this. Consistency then dictates that they don’t support the Christmas bonus either. Some might argue that as a predominantly Christian country, the state is exclusively warranted in helping people enjoy the second-most important Christian festival. But then they’d also have to argue that the state is partly responsible for ensuring we behave piously.
This illiberal argument is implausible. People should not be forced to pay for pious living via taxation. It was a good thing, for example, that William Gladstone passed the Compulsory Church Rate Abolition Act in 1868, which scrapped compulsory taxes towards the upkeep of churches. But even the piety argument hardly justifies the Christmas bonus because that £10 is not at all likely to be spent on a nativity scene, a bus to a mass, or helping the genuinely needy. Realistically, it’s most likely going to be spent on another box of Quality Street chocolates.
The Christmas bonus should be abolished and the £175 million annual cost of it saved. Fortunately, this bonus has not increased with inflation since its introduction in 1972; if it had, it would be worth approximately £119 and would cost the taxpayer about £2 billion a year. But even the cost of a £10 payment to so many cannot be justified.
Its supporters – and those who benefit from it – might justify it on the basis of concerns about cash flow, or the old idea that the government must ensure our piety. But these argument don’t add up. Given the general paucity of good arguments for giving pensioners a free tenner every year, the only plausible explanation for the Christmas bonus still existing is because no politician wants to be seen as a Scrooge. This is a great shame – because at least if our politicians were to act a little more like Scrooge, we’d not be up to our neck in national debt this Christmas.
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