The government’s decision to remove the winter fuel payment from all but the poorest pensioners prompted the first real test that the Prime Minister has had to face.
The Conservative motion to block the cut, which was defeated by 348 votes to 228, showed the strength of feeling within the House; including some on the government’s own backbenches.
I think MPs of all parties know it’s wrong to take the winter fuel allowance from low-income pensioners. This was a Blair/Brown flagship policy, maintained by Labour, Coalition and Conservative governments since. And it wasn’t so long ago that the now Labour government argued for its retention whilst in opposition.
Twenty six thousand pensioners in East Hampshire are set to lose their fuel payment, unless the government changes course. For many living ‘off the grid,’ this payment will have been earmarked to cover the cost of replenishing oil boilers ahead of the winter months.
Obviously the 26,000 includes many comfortably well-off people. But it also includes many on low incomes indeed.
Having a debate about means testing the allowance (which we haven’t had) is one thing, but removing the entitlement right down to the credit threshold (which is £11,400 a year for a single person) is far from “removing the benefit from the wealthy”, as is claimed.
With energy bills predicted to rise by 10 percent and the end of cost of living payments (which were brought in last year to help people cope with the extreme spikes in energy prices), I have huge concerns about the financial hardship this will bring.
Many of you have written to me about this, questioning the fairness of the policy. One lady wrote to me recently to express her concern about losing the payment. She is only just above the pension credit threshold (by £3 per week) but now needs to find hundreds of pounds to heat her home this winter.
Even many below the pension credit threshold will lose this payment as they do not claim the pension credit they are eligible for.
The government says that it wants to increase pension credit take up.
This is good, but I know from my time at the Department of Work and Pensions that there have been repeated drives to increase pension credit take up. There has never been full take up of pension credit, or even close.
The irony of this, as was pointed out by colleagues in the debate last week, is that if all those that were entitled to pension credit claimed it, this would dwarf the savings made by cutting the winter fuel payments. Which further calls into question the rationale that this is a necessary saving to address the mythical ‘black hole’ in public finances.
The winter fuel allowance is a smart payment because it comes at exactly the time of year that there is an exceptional but predictable increase in cost for pensioners. Frankly, I also worry about the implications for other pensioner benefits and whether they may be at risk.
