Tuesday - The Abolition Of The Winter Heating Allowance Will Hit Every Local Business In The Country

10th September 2024

On the face of it the abolition of the Winter Heating allowance mainly hits pensioners

What few seem to have realised is that pensioners who spend most of their income will have to save up to £300 to put towards their energy bills. This will affect other spending from pensioners who often shop locally.

The experts reckon this is between £1.25 and £2 billion that the government will save.

No matter what the payment is used for it effectively is removing cash from the economy all over the UK.

And for economists it actually removes up to 5 times that amount with the multiplier affect in reverse.

Whether pensioner spend on groceries, clothes or other goods it will have an effect no matter how it is measured.

The allowance has been fixed for many years at the same amount so it has been withering on the vine as they say. So why not just keep it at the same amount being eroded by inflation each year that passes.

Another way to deal with it is to add it in to self assessment and tax it at what ever rate people are on.

More fairly would be to get the billions needed by looking at Capital Gains Tax, Inheritance tax, Pension contributions tax reliefs, Restrict tax relief on ISA's - most of these affect more well off people in society as the poor use almost none of them.

Another place to look could be the interest paid by the Bank of England on deposits held by the Bank of England from commercial banks. There is no real reason to pay this. The Bank of England holds about £750 billion on deposits and pays about £40billion in interest. The heating allowance and much more could be covered at a stroke.

So why are they looking at pensioners to have the so called broad shoulders and not the wealthy companies and shareholders.

Did Labour really get into power to hit the poor in this way.

On Tuesday they vote on it in parliament.