http://www.bbc.co.uk/news/business-25349236

Or you could scrap HS2. Or the Trident replacement. Or...

Do all three.

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Well I am in favour of HS2 and think they should the HS3 to Scotland (assuming they vote no) and one down to the West Country and Wales

You all misunderstand. It's not about the saving. The savings are a pittance in the grand scheme of government finance. They're cutting welfare not because they have to, but because they want to. There's no point suggesting alternatives. They know about them already. They're driven to do this by dogma, not by necessity.

If the government was in surplus, they'd still be doing it. Just the excuses would be different.

Jon

Total Welfare spending is around the £180 billion mark. If they made all benifits means tested that would save a large fortune. My mum for example dosn't need a state pension (she is 78 and still works full time and has a private pension)

For once Jon and I are in partial agreement. If we were in surplus they would want more cuts in order to lower taxes and remain in surplus.

That can be called dogma if you like, or it can be a political philosophy of small government. The choice seems to depend more on the uttering party's inherent animosity to the target than on reason, and as noted many times, UK politics is all about blind animal hate.

The alternative isn't to suspend or cancel any particular transport infrastructure spend - a certain proportion of GDP should be spent on that stuff anyway, so the saving would be diverted to other (maybe better, maybe not) infrastructure projects. And money saved on a defence procurement project would probably go on an alternative one.

Nevertheless, welfare spending is the majority of our budget. If there is a desire to cut the overall spend, welfare is the only place it can realistically come from in the medium term, which is what counts if you want to rebalance public finances in the long term.

50% of the welfare budget is state pension. No government is going to make the basic state pension means tested. Old people vote. And besides these are people who, in the main, have paid taxes for decades. Getting something back in old age is part of the 'social contract' between taxpayers and state.

I'm not suggesting the welfare budget couldn't be better managed, that's unarguable. But the bare fact is cutting welfare spending is far down any realistic list of the ways the government could act to clear it's deficit. Yet it's the one this government seems intent on riding hardest. The only possible conclusion by reasoned analysis is they are prioritising this aspect through choice and using necessity as an excuse.

Unfortunatly the system is broken - what all goverments should ahve done was pay the tax / NI for the state pension into a fund so that it became self funding - but they all just spent it. Now that people are living longer the system cant cope

I agree that no goverment is going to reform it because as you say old fokes vote but that dosn't mean they shouldn't

IMHO benifits are there for those that need a safety net. I personally dont think there should be any universal benifits - all should be means tested

If Osborne is talking about this now, he is doing so because he has done the electoral sums already. Most pensioners are fixed voters - they haven't changed sides in 30+ years and so their ability to affect the outcome of an election is indirect and overstated.

Their self interest and solidarity are also probably overstated. If you can persuade them that means testing will only affect somebody less deserving or needy than themselves, their objections will likely diminish. If you can make the (true) case that the burden of austerity has fallen on their own grandchildren - who they are likely caring for because their direct offspring can't afford day care - they are liable to be more malleable still.

You can probably save some worthwhile cash in the short term by being stingy with side benefits such as free TV licenses and bus passes. But if the goal is to shrink government and reduce taxation over the course of a generation, then it requires a big philosophical change. Namely the move from the form of social compact Jon is alluding to; where pensions are a pot that everybody pays into according to ability to pay, and then draws from according to continued life; to a new one based on the principle of insurance. In that scheme, you pay, probably a bit less, but the benefit of that only accrues if your other sources of retirement income fail you.

To make that latter option work though, you need to discourage a certain type of lifestyle common in the UK. People here typically have grown used to relying on the idea of the state pension; we live in debt for 40 or so years, then clear the debts and live off a state stipend. The small government solution can only realistically provide either a wretched little pension, or else withhold it until you are physically unable to continue working. And to discourage moral hazard, they have to make you afraid of that outcome decades in advance*. So it isn't necessarily the greatest of ideas.

That kind of fear, incidentally, is also very bad for the wider economy. Just as the American healthcare rationing system makes people too afraid to take risks, so would fear of pension mixups. People incorrectly suppose that public healthcare, education, unemployment insurance, pensions etc are a kind of burden on the economy that make it less productive. Lefties often think that we only have these things because otherwise commies would overthrow us. The supposition is that there is no self interest in providing these benefits. But they actually make vibrant economies possible, and we should think twice before randomly cutting any of them.



* I suppose I should add that there are degrees to this sort of thing, and Osborne is too pragmatic to pursue, or probably even want, the most excessive outcomes hinted at there. Just as I am sure Jon doesn't want all of your income taxed at 100%, and for you to be forced to live entirely off of benefits.