Economist Mariana Mazzucato on the economic madness of Labour’s Winter Fuel Payment action.
A couple of months back we wrote about the madness of Labour’s decision to restrict winter fuel payments to those pensioners on Pension Credits. You can read blog post here. The gist of it is that currently there are around 880,000 pensioners eligible for Pension Credits but not claiming them. As a result the Treasury is sitting on £2billion of those unclaimed benefits.
Reeves says her restriction on WFP will allow the Treasury to claw back £1.4billion. No, Ms Reeves, when every pensioner who is eligible sends in their claim, your civil servants will have to transfer £2billion to Dept of Work & Pensions. Net result? You’ve added £600,000 to your nett deficit black hole.
But it’s even worse than that!
And on BBC QT, Mariana Mazzucato ripped apart Rachel Reeves’ strategy. As well as the simple arithmetic of Pension Credit claims, there are the longer term consequences of costs to NHS and social care. She argued that what looks like savings in the short term might be a cost in the long term. As she says:
Cutting support to vulnerable communities is not the path to growth.
Have a listen. And as a bonus she also takes Fiona Bruce down a peg or two.
If you’d like to read more, Mariana Mazzucato was a signatory to a letter to the Times where she and others argued that the UK Government has an opportunity to break the cycle of underinvestment that UK is currently suffering from. Under-investment which has resulted in a vicious circle of stagnation and decline, whereby low investment leads to both a weaker economy and greater social and environmental problems.
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