Tag Archives: winter fuel allowance

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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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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House of Lords slams scrapping of winter fuel allowance for 10.8 million pensioners in advance of Commons debate this week

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Lord Hunt of Wirral, chair of the Lords secondary legislation committee and a former energy minister under Lady Thatcher’s government Pic credit: Official Portrait House of Lords

UPDATE: Government got policy through the House of Commons by 348-228 on September 10. Tories, Lib Dems, Greens, Scot Nats, DUP, Alliance and Reform voted against. Some 53 Labour MPs abstained, one Labour MP voted against.

SECOND UPDATE: A Conservative motion regretting the means testing of the winter fuel allowance and the lack of transparency by Labour was passed by 164 votes to 132 in the House of Lords on Wednesday evening. An attempt by a former Tory pensions minister,Baroness Altmann to annul the cut was heavily defeated.

Infected blood victims may also face further delay for compensation say peers

Peers have slammed the government’s planned means testing of this year’s £200 and a £300 winter fuel allowance for the over 80s which will leave 10.8 million out of 12.3 million pensioners with no money before Christmas.

The Lords secondary legislation committee – which scrutinises laws introduced by government by issuing new regulations which have to be approved by Parliament -is severely critical of the changes, the lack of information, the by passing of proper scrutiny by a government appointed advisory committee and lack of evidence of any research by the Department for Work and Pensions of the effect of the changes.

The committee represents a wide range of peers in the House from Tories, Labour, Liberal Democrat and crossbench peers Including former Labour minister, Tom Watson.

Peers see no need for the urgency to get the change into law by September 16. “We are unconvinced by the reasons given for the urgency attached to laying these Regulations and are particularly concerned that this both precludes appropriate scrutiny and creates issues with the practicalities of bringing in the change at short notice,” the report says.

baroness Altmann

The criticism comes as Baroness Ros Altmann, a former Tory pensions minister, has said she will move a fatal motion in the Lords next week , a drastic power rarely used, to block the government implementing it.

The report points out that winter fuel allowances will continue to be paid this year for people who quit the UK to live in an EU country before 2021. It is likely to be abolished after this year for people who moved to Switzerland, Norway, Liechtenstein and Iceland.

The government are trying to mitigate its effect on the poorest pensioners by encouraging the 880,000 who are entitled to pension credit, to claim. To do this they have to fill in a 243 question form and if they have over £10,000 savings -including money hidden in their homes – get a reduced form of pension credit. So far there has been a five per cent increase in uptake according to the DWP.

The Lords are scathing about this situation.”We are concerned that the Regulations may cause potential inequalities between low income pensioners claiming benefits and low income pensioners not claiming benefits, and it is not clear whether DWP has assessed this risk,” says the report.

The campaign to attract more pension credit claimants is causing admin problems for the DWP with the result that other people due to get pension credit are facing a nine week delay in getting the money, the report reveals. So the government are penalising the poorest as a result of the campaign.

The report also reveals that those on Universal Credit or who live abroad may need to make a claim
for the Winter Fuel Payment. The deadline for making a claim for 2024–25 is 31 March 2025, and claims can be made by post from 16 September 2024 or by phone from 10 October 2024.”

The report also highlights that all pensioners will be hit by the rise in energy prices and many more will start paying tax because of the freezing of personal tax allowances which will go on until 2028.

Keir Starmer and Rachel Reeves are both breaking traditional consultation and witholding information of the effect of the policy change from MPs and peers.

The report says: “All benefits regulations are required by law to be considered by the independent Social Security Advisory Committee (SSAC). This is generally done in advance of the legislation being laid. In this case, the Minister has opted for the urgency provision that allows SSAC consideration to be
retrospective. Since this might be perceived as bypassing SSAC scrutiny, we asked the DWP what, if any, effect an adverse report from that Committee would have after the Regulations have already come into effect. DWP responded that, in line with their legal duty, ministers would lay the report before Parliament, and should the report contain recommendations, lay a statement before Parliament alongside the report. It remains unclear what the practical impact of any statement might be on Regulations which
will have already come into effect.“

Compensation for Infected Blood victims

Peers in the same report have slammed the government regulations permitting compensation payment to infected blood victims, promised with great fanfare by ministers.

The committee’s report said: ” We found the Explanatory Memorandum (EM) to the Regulations overly
complex and technical, while lacking basic information about the policy such as how those infected can apply and from when, how long claims will take to be processed, when successful applicants can expect payments to be made, and the basis on which each claim will be assessed.”

The peers castigate the civil servants for not producing a report in simple, plain English and cast doubt on whether promises by the new government to start payment by Christmas will be fulfilled.

They also accuse the Cabinet Office of witholding information about the process.

“We are concerned that the Cabinet Office is withholding information on the impact and cost of
the Regulations until after the time for Parliamentary scrutiny has passed, which is unacceptable and circumvents proper scrutiny of the Regulations. We have not been given a reason why the costs could
not be published ahead of the budget. The House may wish to pursue the issue of costs further.”

The lesson from both the issues raised in this report is that this new government is not in control of Whitehall and allowing civil servants to evade proper scrutiny on the measures they are introducing. Either ministers are being inept in not following proper procedures or this is a deliberate decision not to provide MPs and peers with information allowing them to scrutinise the new government’s decisions.

Sir Keir Starmer says he is expecting to be the most unpopular Prime Minister of modern times. He is certainly knows how to go about it.

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Why the Tory plan to axe pensioners fuel benefits is as flawed as Labour’s Ed Balls up

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Tory manifesto

Tory Manifesto: An Ed Balls Up on fuel payments for pensioners

 

CROSS POSTED ON  BYLINE.COM

This  is the extract from the Tory manifesto relating to plans to axe the £200 a year payment to all pensioners and the £300 a year payment to those over 75 . The plan is stolen from the Labour manifesto of 2015 and was originally proposed by Ed Balls to “save £100m “.

we will target help where it is needed most.So we will look at Winter Fuel Payments, the largest benefit paid to pensioners, in this context. The benefit is paid regardless of need, giving money to wealthier pensioners when working people on lower incomes do not get similar support.

So we will means test Winter Fuel Payments, focusing assistance on the least well-off pensioners, who are most at risk of fuel poverty.

Fine words but very difficult to implement. Why?

Four years ago I investigated how Labour could implement the same policy – and found it unfair and unworkable. This is what I said:

“As a punter and pensioner who pays higher rate tax because my freelance earnings top up my pension I expected to be one of the people targeted by Ed Balls. In fact it will have zilch effect, a load of old Balls if you like.

Let me explain why. The fuel allowance is currently paid to individual pensioners with a cap of £200 per household. So for a start I only receive £100 of  fuel benefit. The other £100 goes to my wife, also a pensioner, who is a standard rate taxpayer. So his planned saving will be halved anyway in my case.

But it is actually worse than that. My wife became a pensioner before me and was entitled to the full household fuel allowance in her own right. So when I was on The Guardian, ( then on just over £80,000 a year) our household was receiving then  a £200 fuel subsidy for a short time. What will happen under the Balls changes is that my wife will get back the full benefit of £200 – so we will still continue to receive exactly the same subsidy.

I suspect I am not alone. I know of many people around me in the shires, where in traditional families of that generation the main earner is the male who will  pay high rates of tax. His spouse who brought up the children, and did part-time work instead, would be a  standard rate taxpayer. These wealthy households will continue to get the subsidy.

Ed Balls

Ed Balls in more serious mode

Now Ed Balls could get round this by imposing a household cap equivalent to the income level set by the higher rate of tax. But if he does this he will run into fresh problems.”

I chased this up with the Inland Revenue.

They confirmed four years ago that they do  not collate figures showing how many households have higher rate and standard rate taxpayers who are currently eligible for winter fuel payments. They do not need to collect the information as taxpayers are assessed individually. So they don’t know the breakdown. The only figures they have are the number of higher rate taxpayers who are pensioners. I doubt anything has changed.

Theresa May

Theresa May:Leader of the Tory party. Pic credit:BBC

So how are the Tories going to do this. They could scrap the present system and go back to the old fashioned 1950s style tax system- where the man had to fill in the form for the household. But that would be deeply regressive, anti feminist and take no account of modern relationships where couples may not even be married or have  a gay partnership.

They could limit payments only to those claiming pensioner credit – removing all other pensioners- but that would hit the JAMS – just about managing pensioners with a huge hole in their income and be deeply unpopular.

Or they could  say every person has to fill in a means test form – which means even if it was done on line – have to employ more staff at a huge cost just when they want to axe more civil servants.

It ain’t going to work and will be deeply unpopular and  be full of anomolies.  In other words Theresa May has just created another Balls-up.