When Labour announced the scrapping of the winter fuel payment for all but the poorest pensioners, a friend expressed their disgust at the decision. Having only just returned from their fourth overseas holiday of the year, with just another two to enjoy before Christmas, they explained to me how typical it is that you wait for years to retire and just when you get to pension age the government removes the winter fuel payment. That £150 or even £300 might pay for several more easyJet and Ryanair flights to Tenerife or Benidorm. So unfair.
Given the catastrophic mess in which the Conservatives left the national finances, it was not surprising something had to give. The cost to the exchequer of the payment is over £2 billion a year and, Labour said, if the Tories were playing fast and loose with taxpayers cash, then they would not be. But has the government made a mistake in scrapping the payments? I am beginning to think they may have done.
My initial reaction when I heard the new that the payment would in future be directed only at poorer pensioners was that it was the right thing to do. For many folk, it helped pay for things that were nothing to do with heating bills. Full disclosure: I am in that category so we donate the winter fuel payment, and more besides, to our charity of choice. I say this not to illustrate what a wonderful and generous human being I am, although that is demonstrably true (!), but that it is money we welcome but frankly don’t need. But there are millions of people who do need help and it is not just pensioners.
My concern is that the government may not have properly thought this through. In general, I oppose means testing, which is what they are proposing to do instead of simply paying everyone, not least because it is administratively cheaper to do it that way. And making blanket payments means that no one can miss out, even if millions of better off pensioners get money they don’t need. The fact is that the state pension, on its own, is a pittance, a mere £221.20 a week and for those who, for once reason or another did not also make private provision for old age, that is not much to live on. They may get the means tested Pension Credit to top up their pensions, but some 880,000 households haven’t claimed it, either out of some misguided sense of pride or ignorance. That is what has led to pensioner poverty. When scrapping the winter fuel payment, I don’t think the government allowed for that and a campaign to get those 880,000 people to claim it may make a dent in the overall number, but the fact is some people will still be in financial bother and will freeze, perhaps even to death, this winter.
I do not doubt that there is a significant degree of pensioner poverty in the UK, yet pensioners are the group we see the least of in our food bank. Perhaps, they don’t come out of some misguided sense of pride, I honestly don’t know, but the people we see are rarely of pension age. We see people from all manner of backgrounds including shop workers, nurses and, this week, a postie, and the reason we see many of them is because of massive fuel bills which eat into their low incomes to the extent they can’t afford to eat. Rather than cutting winter fuel payments from older folk, maybe we should extend them to younger people who endure similar, if not worse, levels of poverty than older folk. After all, pensioners have enjoyed an increase of £1400 to their state pensions in the last two years. How many people in low pay work or disability benefits can say that?
So while it seems right to end these payments to better off pensioners, there is an issue of collateral damage. Alongside those who really don’t need the payments, the government has not addressed the issue of those who fall between the cracks. More than one journalist has described Labour’s plan as “bad politics”. And it is bad politics, badly presented politics, too. When and if the media covers stories of pensioners freezing to death this winter, it will be a terrible look. The party that gave us the welfare state, allowing its people to freeze to death. The End Fuel Poverty Coalition pressure group has estimated that nearly 5000 people died last year as a direct result of fuel poverty, a figure that will surely rise if fuel payments to millions are withdrawn. I am not convinced that merely saying, EVERYONE CLAIM PENSION CREDIT! is a sufficiently good slogan to address a problem created in 11 Downing Street.
The scrapping of winter fuel payments to the better off does, in principle, make sense. To not think through the consequences for those on the edge of poverty does not. The blunt instrument of means testing will be shown to be flawed, especially if we have a bad winter and many more pensioners die. How could a chancellor, a Labour chancellor, survive a situation like that? I am not sure they would deserve to, either. So, what should the government do?
I believe they have three options:
- They plough on with the policy of scrapping winter fuel payments, regardless of the political damage and more importantly the likely loss of human life.
- The U-turn, announcing that they “have listened to the concerns of ordinary people” and cut expenditure somewhere else.
- Introduce a different method of determining entitlement to the winter fuel allowance on the basis of Council Tax bands, given that the better off normally, although not always all, live in higher banded properties.
I would favour the second option for this year with a view to coming up with well thought through alternatives, like option three, for future years.
Doing the right thing is not always good politics and when it appears to be poorly thought out, like the scrapping of winter fuel payments to all except the very poorest pensioners, when actually it would affect many more, dragging them into fuel poverty, drags what appears to be a straightforward idea into a murkier world.
Finally, the question of fuel poverty is far wider than the issues affecting seniors. The truth is that millions of working age people are living in poverty, too, and there has never been a winter fuel payment for them. And let us never forget that the state retirement pension is a contributory benefit, regardless of how some people spin it another way. If the retirement pension is the gateway to winter fuel payments, why not everyone else on benefits? It’s tricky, isn’t it, but we have to know why seniors have such power: they vote at general elections. If younger people voted in higher numbers, governments would have to listen to them, too.
My feeling is that there will be a U-turn on the scrapping of the winter fuel payment and it will be a political calculation. They will conclude that this is not a fight worth having, that if there have to be “tough” and “difficult” decisions, then make them about something and someone else. easyJet and Ryanair will continue to benefit as wealthier pensioners use their fuel payments in order to get away from the British winter but if it means other people don’t freeze to death I reckon most politicians would say that’s a price worth paying.
