Ed Balls plans to bring pensions into welfare cap

ED BALLS yesterday indicated Labour would include state pensions within a cap on welfare spending, opening up a potential battle line with the Conservatives for the 2015 general election.

George Osborne is going to announce his cap in two weeks’ time,” the shadow chancellor said yesterday. “I do not know whether he would exclude pension spending or include it. At the moment our plan is to include it.”

The shadow chancellor swiftly clarified his comments on the BBC’s Andrew Marr Show, insisting he does intend to break the so-called triple lock that ensures state pension payments rise by at least 2.5 per cent a year. But he said one way to reduce the burden would be increasing the retirement age.

The Labour leadership is seeking to rebuild the party’s economic credibility and last week unveiled plans to set a rigid cap on all non-cyclical welfare payments. However the pledge to maintain the triple lock on pensions means other benefits would be under pressure.

Pensions are considered to be politically toxic by Westminster strategists because the elderly are more likely to vote than the young.