Tag Archives: rachel reeves

Winter Fuel Allowance: Rachel Reeves relents on a policy Labour should never have done in the first place

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05/07/2024. London, United Kingdom. Rachel Reeves, Chancellor of the Exchequer poses for a photograph following her appointment to Cabinet by Prime Minister Sir Keir Starmer in 10 Downing Street. Picture by Lauren Hurley / No 10 Downing Street

Last year the biggest hit on this blog was when I condemned the decision by Sir Keir Starmer and Rachel Reeves to abolish the winter fuel allowance for all pensioners except the poorest on pension credit. The blog went viral and currently stands at 188,400 with 129 comments.

The decision – one of the first by an incoming Labour government – was inept, stupid, ill thought out, and rushed – and showed that the Labour government was completely out of touch with its base and its reputation for helping the poorest.

There was a decent case for restricting the payment to the wealthiest members of society who did not need help with their fuel bills. But by setting the figure so low as £11,300 to get it and trying to get people to claim pension credit – which has been a policy failure for years – this was a serious own goal.

The decision to use regulations to do this was attacked by the House of Lords statutory instruments committee – when they examined the detail – and ministers by passed their own benefits advisory committee, the Social Security Advisory Committee, on the flimsiest excuse that they didn’t have time to do this to make sure it could be implemented as an emergency. The committee itself when it finally got to discuss the regulations pointed out it was perfectly capable to look at it at an emergency session. It did this when the last government introduced massive social security changes to cope with lockdown during the pandemic.

The optics also looked bad for any politician. Claiming they had found a huge black hole in government finances it looked as though the first people who would plug the gap were pensioners, many of them surviving on incomes less than £20,000 a year. Pensioners and the disabled also need warm homes in winter probably more than any other people and the government’s claim it was implementing the triple lock to raise pensions was no use in the winter. It would not be paid until the spring when temperatures begin to rise and some would be scrimping and saving to try and keep warm before receiving an extra penny.

The result came back to bite Labour in the spring council elections and Parliamentary by-election in Runcorn, when voters dumped Labour in droves turning to Reform, the Greens and the Liberal Democrats instead.

Labour MPs and activists found this was one of the most cited reasons why people turned against them during the election. As a result Reform could capitalise by gaining control of a swarth of county councils and some mayoralties. The Conservatives were still not trusted by people after their 14 years in government, but to be fair to them they never proposed to cut the winter fuel allowance in the first place.

Luckily for Labour it is four years to the next general election so there is a chance it might be forgotten how stupid they were after four winters. And the mechanism they have proposed to pay the allowance back to nine million pensioners is fair with those earning £35,000 or more having to pay back the money in their annual tax return. The big question is why they didn’t do this in the first place.

The overall policy will still save £450m versus the universal system. But £1.25bn of the £1.7bn projected saving when this policy was announced is gone. Rachel Reeves, the chancellor, was claiming she couldn’t have done this when the government came into power because of the state of the finances, but can now because the situation has improved. She will have to explain this big change in her statement to MPs this week.

In my view the government overall has lost a lot of support by targeting pensioners not only in this way but also in the way it has treated 50swomen who had to wait six years for their pension by completely rejecting any compensation for them and ruling out mediation. I am sceptical that the WASPI campaign will get anywhere by going to court to try and revive the now rejected Parliamentary Ombudsman’s report on partial maladministration.

The issue was always discrimination as well as maladministration and the Ombudsman’s report was a very tepid solution for those who lost tens of thousands of pounds.

And ministers are being dilatory in paying out money to HIV contaminated blood victims and those swindled by the Post Office computer scam. All these affect many in the same age group.

The government has got a lot to do to regain popularity to get a second term in office, but this U turn on the winter fuel allowance is only a start.

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Social Security watchdog warns ministers of flaws in the scheme to scrap pensioner winter fuel allowances

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Department for Work and Pensions

In a polite but tough message to Liz Kendall, the work and pensions secretary, the Government’s official advisory body on social security, has exposed flaws in the government’s implementation of its rushed policy to abolish winter fuel allowances for 9.3 million pensioners and encourage the poorest to claim pension credit.

It also undermines the government’s case that it couldn’t consult them in advance because of the short timetable Sir Keir Starmer and chancellor Rachel Reeves imposed on introducing the change.

Dr Stephen Brien, chair of the Social Security Advisory Committee, says in a letter to Liz Kendall, ” I trust you will agree, there are considerable benefits in draft legislation being presented to us for statutory scrutiny before being laid, and that ‘urgency’ should be used only in exceptional circumstances. This Committee has a strong track record of supporting successive Secretaries of State respond at pace to emerging crises and risks. We have often arranged additional meetings to enable scrutiny to take place at short notice, in an attempt to avoid the need for invoking the urgency procedure. ”

In other words; ” we could have accommodated you, if only you had asked.”

The letter goes on to point out problems implementing the plans to increase the uptake in Pension Credit and outline flaws in the changes.

It reveals that although the ministry is committed to recruiting an extra 450 staff to cope with the demand for new pension credit claims not one of them can start handling a single claim for two months because they need training.

As the committee points out:” we remain concerned about the capacity of the Department to process Pension Credit claims in a timely way, ensuring that not only are people able to establish entitlement to Winter Fuel Payments, but also that they can be paid this Winter – at the point at which they are needed most.”

In other words ” given your timetable some of the poorest could wait to winter 2025 to get a penny”.

And it questions the headline figure of £1.3 million savings pointing out it could vary because of the extra costs of paying out more pension credit. The government only provides one example – assuming a 5 per cent extra take up from the 880,000 who could get it.

The letter says: This figure is ” representing a little over 100,000 additional households. We have not been presented with any rationale for such a central case estimate (corresponding to a closing by just 14% of eligible non-recipients).”

The committee would expect the government to provide a range of estimates – and points out that if they don’t provide one, the Office for Budgetary Responsibility will do it for them in the Budget.

It adds; ” this is no substitute for the Department’s timely analysis in support of its own proposals disconnected from the Budget process.”

5000 pensioners could be worse off by switching to pension credit

When it comes to flaws the most glaring one affects a small minority of 5,000 of the 10.8 million pensioners who are affected who claim child tax credits. If they claim pension credit to get the fuel allowance , it reveals, THEY COULD BE WORSE OFF because they lose the child tax credit. And the Department has not even told them.

The letter says: ” In the absence of any tailored communications for this group during the current take-up campaign, the Committee is concerned about the potential for confusion about what this group should do. In particular, there is a potential risk that some people may take steps to move onto Pension Credit in the belief that this would be beneficial, but ultimately be financially disadvantaged.”

It calls for an urgent change to the regulations to allow any pensioner who inadvertently does this to revert back to the existing system.

Then there those on housing benefit – a means tested benefit which does not qualify by itself for pension credit.

The committee says: “The Committee understands that take-up of pensioner Housing Benefit is higher than for Pension Credit and that around 120,000 pensioners on HB only might qualify for Pension Credit if they claimed it.”

It urgently recommends that these people are passported straight onto pension credit for this year only while their claims for pension credit are checked.

Finally there are the disabled. “The Department estimates that around 71% (1.6 million) of people with a disability will lose entitlement to the allowance.” Again the committee calls for the government to target those people who claim means tested benefits because they are disabled to make them aware of pension credit.

It goes on to criticise the government for not having an impact assessment of its own proposals – Sir Keir Starmer thought it wasn’t necessary – and warn the government that the Public Sector Equality Duty could be breached.

“Having identified any disparities in impact across protected groups, we would like to have a greater understanding of how this evidence has influenced, and been reflected in, the regulations. For example, what anticipatory actions have been taken; and what types of disparity are considered a necessary consequence of the policy intent?”

In fact according to the Office for National statistics the cuts are aimed almost exclusively at white British people – only five per cent of those affected are from ethnic minorities.

This again shows how rushed regulations can be full of holes and unintended consequences and that neither Sir Keir Starmer nor Rachel Reeves took enough care over drafting them. Perhaps they genuinely don’t care, as pensioners can’t play a role in their growth plans and the sooner they die off the better. I wonder whether either of them have any grandparents.

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Millions of pensioners on or just above the poverty line will lose winter fuel allowance – Age UK research

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The government’s refusal to publish a proper impact study of exactly who will be the worst off from the abolition of the winter fuel allowance for 10.8 million pensioners was one of the worst acts of this new Labour government.

Not only was it bad government not to provide the facts on such a big change for so many people but it looks like a deliberate act to conceal the damage ministers knew it would have on vulnerable people. But people are not fools and already where they have a chance to vote in local elections they are showing disdain for what Sir Keir Starmer and Rachel Reeves have done. In a very short time voters have gone from voting for anyone who is not Conservative in the general election to anyone who is not Labour in local elections.

So it is good news today that a major charity, Age UK, has attempted to fill the gap and provide what the government refuses to do.

And it is not surprising that once again women, especially those living alone, the disabled, and the very elderly are most at risk. Elderly women are becoming the favourite target of both Tory and Labour administrations- first they raised the pension age without properly informing women – so 3.6 million 50s born women expecting a pension at 60 had to wait another six years to get one. Then they fiddled figures so people on the old pension would not properly inherit their husband’s pensions. And to add insult to injury the Department for Work and Pensions made huge errors in pension payments to women and is taking ages to pay out what they have lost.

The figures from Age UK research show pensioners living below or just above the poverty line, some 82%, or four in every five, will lose the Winter Fuel Allowance as a result of the Government’s decision, including 80% in this group who are aged over 80 and 78% who are disabled.

It is not surprising that there is such a divide in the UK. A report by IPPR North earlier this year found that life expectancy is falling in poorer areas compared to the wealthier part of the country. A man in the poorest part of Blackpool can expect on average to be dead a year after gaining their pension at 66 while a woman living in Belgravia in Kensington can expect to live to 94.

  The Age UK Report say10.7m UK pensioners will lose their WFP of whom almost one in four (23%) live in poverty or just above the poverty line. Age UK take poverty to mean living 50 per cent below the median income and just above poverty to be 60 per cent of the same figure. Full details of their research methodology can be seen here.

Women as usual to take the highest proportion of the cut

Some 1.4 million are women; 1.1 million are disabled ,800,000 are over 80 and one million live alone.- all factors that could affect their health and well being if they cannot keep warm this winter.

Caroline Abrahams CBE, Charity Director at Age UK said: 

“I think most members of the public will be horrified that this is the outcome of the Government’s decision, because it means that millions of pensioners are being exposed to the risk of failing to be able to stay adequately warm this winter, even though they are living on a low income. There will be widespread agreement, I’m sure, that Ministers must act in the Budget to protect them – and the best way for them to do so by far is to retain WFP as a universal entitlement this winter, before giving their policy options careful consideration as part of the Spending Review next Spring.

“However, if the Government is dead set on pressing ahead, the very least they should do is to greatly expand the numbers of pensioners who will receive a WFP beyond the small group they have so far said will retain it. They could achieve this in part by automatically giving the Payment to pensioners on other benefits, such as Housing Benefit, Council Tax Support, Personal Independence Allowance, Attendance Allowance and Carers Allowance. Even this would not be enough though because many pensioners on low incomes or in vulnerable circumstances would still miss out on a WFP when they can ill afford to do so. This means the Government would need to go further; for example, looking to give extra help to the older people who for various reasons receive only a small proportion of the full State Pension, for whom the WFP is an absolute lifeline.”

Age UK continues to urge the public to show solidarity and sign its petition to Save the Winter Fuel Payment for struggling pensioners.  The petition has now received more than 553,000 signatures showing the strength of public feeling behind the rushed decision to means test the Winter Fuel Payment.

Certainly there is enormous interest in this issue. My own blog has had over 190,000 hits for raising it and some of the comments from distressed people hit by this have been heart breaking. Time for the government to reverse part of this ban. We are not all as rich as Sir Keir Starmer and Rachel Reeves not to need it.

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My interview on the 50swomen pensions scandal and the scrapping of the pensioner’s winter fuel allowance

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If pensioners die from winter cold should their gravestones be engraved with the words ” Frozen to Death by Rachel Reeves and Sir Keir Starmer ” for eternity?

This is the recording of my interview last night with Ian Rothwell of Salford City Radio on the failure of the government to agree yet to any compensation for the women born in the 1950s who had to wait six more years to get their pension and the government’s sudden cruel decision to abolish the winter fuel allowance with little notice for 10.8 million people.

A reminder the original story on my blog has now got over 190.000 hits reflecting the strong feeling people have about Labour’s decision to do this leaving many of the poorest pensioners, many over 80, between £200 and £300 worse off this winter by setting such a low income level to qualify for the money.

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Winter Fuel Allowance: Equality statement reveals the scale of Rachel Reeves nasty blow to poor and disabled women pensioners

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05/07/2024. London, United Kingdom. Rachel Reeves, Chancellor of the Exchequer poses for a photograph following her appointment to Cabinet by Prime Minister Sir Keir Starmer in 10 Downing Street. Picture by Lauren Hurley / No 10 Downing Street

UPDATE: Statistics released today (Tuesday) show claims for Winter Fuel Allowance jumped by 214,000 last year. More and more people over 80 are claiming the £300 higher allowance which had reached 3.3 million for the first time. The new figures mean the government will save even more money by abolishing it for all those not claiming pension credit, particularly from the very elderly. Figures released also show that those state pensioners living in EU countries who will continue to get the allowance amounted to 34,300. Over three quarters of them, some 26,000, live in the Republic of Ireland while those in Northern Ireland will get nothing. Qualifying for the allowance last year was this week which raises whether those claiming pension credit after this week will get the money for this winter.

Chancellor’s decision fuels racism when it is revealed her cuts are aimed at 95 per cent of white British born people

At last no doubt embarrassed by the Equality and Human Rights Commission which said the new Labour government was in breach of the Public Sector Equality Duty, the Treasury and the Department of Work and Pensions have had to release a breakdown of who is affected by the abolition of the winter fuel allowance.

Both departments used the mechanism of a Freedom of Information request made in August and chose a Friday afternoon to slip it out after Parliament had gone into recess to avoid too much publicity.

The clue is in what the announcement is called – an Equality statement – not an impact statement which was demanded by the House of Lords. In fact there has been no impact statement prepared at all even when Age UK said that about two million pensioners who will lose the annual £200 or £300 payment are just above the cut off point.

The document itself makes a claim that more men than women are affected by the change. But this is based on percentages not the actual figures. As it says: “This means that 85% (5.2m) of women receiving a Winter Fuel Payment (WFP) will lose out, compared to 91% (4.8m) of men. The reason for this is that women live longer than men and are more affected by the loss of the payment. The gender breakdown is 54% (6.1m) of those who received a WFP in GB in 2022/23 Female, and 46% (5.2m)
Male.

The figures reveal that the older you are, the bigger the loss you make, partly because the payment for over 80s is £300 rather than £200 per household.

The statement says: ” Although a smaller proportion of those aged 80+ will lose out than those under 80, due to the higher rate of WFP from that age, older pensioners who are affected will be proportionally worse off financially as a consequence of the policy.”

This is still 2.7 million people in top of the 7.9 million aged 66 to 79 who lose out.

Then there is the effect on the disabled – those claiming attendance allowance and disability living allowance. Here 1.6 million lose out and they must be the most vulnerable to the cold.

So if you are woman, more elderly and disabled you are worse off. If you are all three it is catastrophic.

The government has made a lot of noise about the 880,000 people not claiming pensions credit who could qualify by applying and getting the winter fuel allowance. But the paper says despite all the noise ministers are only expecting another 100,000 to claim leaving 780,000 still going without it.

The figures for existing claimants for pension credit are interesting. The most successful claimants are men not women – despite men being in a minority. The least successful are couples and there is a nasty reason for this. Under the Tories rules were changed so that both people had to be aged 66 to get it. So if you had a man who was 66 married to a woman who was 62 you would be excluded from claiming it until the man was 70 and the woman 66. No wonder the take up is lower. And Labour haven’t changed the rules.

Finally there is an ethnic breakdown. In the UK among the general population 84 per cent of the people are white British and 16 per cent are from ethnic minorities. Among the pensioner population, 95 per cent are white British and only five per cent are from ethnic minorities. So Labour in this case has targeted anybody who was born here far more heavily than people who were not.

This may well explain why I am getting a backlash from readers of this blog who complain that the government is doing more for people who have just arrived here than the population who have worked here since they were 15. They think it is unfair.

Cheerleader for Nigel Farage?

So we have the extraordinary situation that Rachel Reeves is inadvertently becoming the cheerleader for Nigel Farage by providing him with a platform to say that British born people are being unfairly penalised.

Her policy among that generation may well drive them to support Reform because they have a grievance that only Labour has created and cannot be blamed on the Tories. This unfortunate situation aids racism and has more purchase with people than tales of a £22 billion black hole.

Then there are international repercussion. The last government was already in trouble with the UN Convention on the Elimination of all Discrimination against women and girls (CEDAW) in Geneva. Although we ratified it nearly 40 years ago when Lady Thatcher signed us up, we have not implemented in law many of the provisions. This is a new policy – even though it was done administratively – and the government has not tested the impact on women which is against the convention.

More close to home there could be a case for indirect discrimination against women because although the policy appears to be fair to all pensioners, women are again bearing the brunt of it.

Of course as I argued in a previous blog both Rachel Reeves and Sir Keir Starmer know that many pensioners will die before the 2029 general election so they won’t be here to vote. By implementing this cruel policy for those just above the cut off point they know many more will join them as they freeze in their homes this winter.

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How Starmer and Reeves pension savings are deliberately driving the elderly to an early grave

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1950s born women to face a quadruple whammy to their hopes over compensation, heating allowances, fuel bills and new taxes

Sir Keir Starmer in the Cabinet Room Pic credit: Gov Uk

In just 50 days of a new Labour government pensioners rather than the better off have been singled out to pay the price to balance the books of running the country.

They are the people who are often not in the best of health, have worked most of their life and most don’t go around rioting and throwing fireworks or bricks at the police.

So for Sir Keir Starmer and Rachel Reeves they are a soft target to save money, particularly if your object is to grow the economy.

Rachel Reeves, Chancellor of the Exchequer poses for a photograph following her appointment to Cabinet by Prime Minister Sir Keir Starmer in 10 Downing Street. Picture by Lauren Hurley / No 10 Downing Street

To them the elderly are a burden. That is because they would find it difficult to have enough energy to start new businesses, expensive to look after since they are more likely to use the NHS, and the cost of pensions is the real big ticket item for the Department for Work and Pensions costing £125 billion a year – far outstripping any payments to other people. The total DWP annual pay out to people is £258.4 billion – so pensions are almost half the bill. Rachel Reeves will know all about this as her partner, Neil Joicey was finance director at the DWP.

If ministers are prepared to ignore that pensioners feel they have contributed to their pension and it is theirs by right, it would be rather convenient for the Treasury if they died sooner than later. Life expectancy is already stagnant and the new Starmer and Reeves measures could see it fall. Also pensioners were the last group who chose to vote Conservative rather than Labour at the general election, so it would be politically convenient with a five year government guaranteed by its large majority if many had died by 2029. The dead can’t vote.

Darren Jones Pic credit: ITN News

The justification for means testing the fuel allowance – worth up to £300 per pensioner household – put by Darren Jones, the new Chief secretary to Treasury, was that it was a blanket benefit costing £1.4 billion claimed by the rich and poor. True a 90 year wealthy woman living in Kensington might not miss it, but an average 66 year old man living in Blackpool and about to die a year after getting his pension, will.

But his argument could also be used to abolish the universal state pension- and for all I know is being discussed in the Treasury – since it goes to billionaires -as well as the poorest.

The cut off point to lose the fuel allowance is £218.25 a week for single pensioners and under £332.95 for couples. Some 880,000 earning less than this could apply for pension credit but the forms are daunting for this. I checked to qualify you have to answer up to 243 questions. Read it here.

Some of the questions are bizarre. Why would you have to tell the DWP for example, if you share your home, with another person, whether he or she has ever been in prison or held in custody at a police station? Why do you have to tell them whether they have ever had four weeks holiday outside the UK? If you have over £10,000 in savings you have to fill in an additional 31 questions on another form. You have to disclose all the money send original bank and building society savings books and reveal how much cash you hide at home. You are expected to fill in the form yourself, if you can’t expect a visit from a DWP civil servant demanding why you can’t. No wonder a lot of people are put off and Ed Miliband’s cheery suggestion you apply, appears to mean he hasn’t a clue how detailed the forms are.

The other outrageous thing is that any government proposing a change should do an impact assessment on what this will mean. This was ignored by Rachel Reeves- so keen was she to announce the cuts.

On top of this we now know, after the announcement from the regulator, Ofgem, that energy prices are going up 10 per cent from October adding an average £149 to people’s bills just as the £300 fuel allowance is being abolished. At the same time Labour pointedly did not agree to raising pensioners tax allowances so with the triple lock in place, to avoid the poorest pensioners with little or no extra pension in place starting to pay tax again.

Michael Shanks MP and junior energy minister

As for the 1950s born women the chance of any compensation – even the paltry sums of between £1000 and £2900 recommended by the Parliamentary Ombudsman — is getting dimmer by the day. A rather frank answer to a constituent from Michael Shanks, the new Labour MP for Rutherglen and junior energy minister, has revealed the Treasury has taken over deciding whether they get a penny.

He wrote:” My understanding is it is being looked at seriously by Treasury and DWP Ministers now they are in post and fresh discussions are taking place about what happens next.

He went on: “You may be disappointed we didn’t simply commit to compensation for all, but as we have discussed before, I think it is more complex than that and I’m not convinced a one size fits all approach is right, or a good use of public money. The PHSO has recommended £1-3,000 per person, costing up to £10bn. However, this would give compensation to women who did know about the change – around 43% of WASPI women according to the PHSO. We need to ensure that any compensation is fair, so that at such a difficult time for the country financially we are not paying out thousands of pounds of compensation to women who were well aware of the changes, and that we are not insulting those badly affected with a mere £1-3,000.”

I have looked at the PHSO report and couldn’t find a reference to this 43 per cent who knew. If this is true it means that over 1.5 million will get nothing even if the government decides some compensation is due.

Meanwhile the campaign by CEDAWinLAW goes on. Jocelynne Scutt, the former Australian judge, who headed an independent tribunal into the fate of 50s women who lost their pensions for six years, was handing in a letter following a petition signed by 37,000 at Number Ten Downing Street today to drive home to Sir Keir the strength of feeling over the discriminatory issue and the need for mediation with ministers. WASPI, which represent 186,000 of the 3.5 million affected say they will have a meeting with minsters next month.

Here’s a newly edited video of the visit by Jocelynne Scutt explaining the latest moves by CEDAWinLAW.

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