Monday, July 29, 2024

On not being convinced by the case for axing winter fuel payments

I've seen many tweets in favour of Rachel Reeves's decision to stop making winter fuel payments to pensioners unless they are on welfare benefits. Most include a statement along the lines of "it's wrong for public money to go to people who don't need it".

Leaving aside the facts that our state pensions are on the low side by European standards and that its arguable some of the people who will no longer receive these payments do need them, I distrust arguments that make things sound so simple.

Because I don't believe we arrive at our political views so logically. We don't carry around a neat set of principles that we can apply to any question in the news: it's more that we have an instinctive reaction to a new policy, then cast around for a general principle we can use to justify it.

And I don't think the principle that people have come up with is as reasonable as it sounds. It could, for instance, be used to justify anyone with a decent private pension being denied one from the state.

Under it, any encounter with the state would be an unpleasant affair of means tests and the accompanying threats of prosecution if you make a mistake on a form.

The reality is that an effective and civilised welfare system will include a mix of universal and means-tested benefits. Where you draw the line between them is not a question of simple principle, more one of practical judgement that will be influenced by how much government can afford and a general desire not to discourage people from seeking help at all by making it too demeaning.

But maybe some of these tweeters do want to discourage people from claiming benefits. I have not seen one of them go on, after welcoming Rachel Reeves's decision, to set out a way of spending the money saved that will be of more benefit to the poor. At least Reeves said "This was not a decision I wanted to make."

3 comments:

Anonymous said...

Yes! Would you see Universal Basic Income as part of an effective and civilised system? I think the same arguments are used against it as you take to task here.

Ruth Bright said...

It is the middle band of pensioners that are the worry. Pensioners who just miss out on Pensioner Credit lose out on many things that come with it. Waste around Attendance Allowance (money for care at home, even if you are a self-funder in a care home) would be a better target.

Laurence Cox said...

As the old saying goes, "if I wanted to get there, I wouldn't start from here", but Reeves has to start from here. There is no doubt that there are millions of pensioners with occupational as well as State pensions who are well-enough off not to need the Winter Fuel Allowance, but the only means we already have of identifying the poorest pensioners is through Pension Credit (as imperfect as it is). We don't really want Reeves complicating the income tax system even more by clawing back the WFA from richer pensioners through taxation, which could only be done in a Budget and will not have any effect until next financial year. It disappoints me that we seem to have returned to politics as usual so soon after an election. I would have had no objection if Reeves had also ended the pensioners' Christmas bonus (a mere £10 annually) for those whose only qualification is a State Pension; the cost of administering it must be enormous. There is nothing fundamentally wrong with targeted benefits as long as there are no cliff-edges where people can be worse off by earning slightly more. (corrected typo)