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The British government has resorted to begging, asking pensioners to give back some of the cash they receive in benefits from the state. Faced with a ballooning welfare bill and hamstrung by a promise to protect the elderly from cuts, Iain Duncan Smith, the U.K.'s Work and Pensions Secretary, has suggested that wealthier pensioners could turn down some of their entitlements, such as winter fuel subsidies and free bus passes, to help reduce government spending.
His comment, made over the weekend to the Sunday Telegraph newspaper, reflects the government's frustration: contrary to popular belief, it is the armies of the elderly, not the workshy and fecund dole scroungers, who soak up the lion's share of the welfare bills. Vince Cable, the Business Secretary, has already suggested that winter fuel supplements, currently doled out to anyone eligible to claim a state pension, should be means-tested. Free bus passes, available to anyone over 62, cost the taxpayer £1-billion ($1.6-billion) a year while the fuel subsidy costs more than £2-billion but Prime Minister David Cameron won't renege on his promise to protect pensioners.
There are just too many pensioners and the Prime Minister won't do anything to anger a huge constituency. They are more likely to be found casting a ballot on election day than the unemployed single mother with four children living in public housing. The latter are now being shaken down in reforms to the welfare system; these will bundle various welfare benefits into a single, capped payment, intended to spur more people into jobs and reduce the attraction of welfare.
Still, it is not enough. Debt is not falling, the state's burdensome share of the economy is still rising and there is pressure to take on vested interests. Could it be that the successful public baiting of tax-avoiding U.S. corporations and overpaid bank executives has sparked hopes that the nation's retirees might be bullied into compliance? If Starbucks can be persuaded to make a voluntary tax payment to the Exchequer, perhaps Granny might be persuaded to lower the thermostat and wear an extra pullover?
If voluntary repayment sounds absurd, it is because the government is panicking. Britain's over-indebted public sector juggernaut has shuddered to a halt at a crossroads. The welfare state was created not on a principle of charity but one of universal entitlement: the state would carry all of its citizens, care for all of the sick and look after all of the elderly. Everyone now knows that the cost of maintaining the system of care for all has become too great for the nation to bear, but no one has the courage to say publicly that it must be dismantled.
Carl Mortished is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights.