THE Labour Government has done “nothing more, and nothing less” than cut pensions, a social policy expert has said.
Paul Spicker, an author and academic who is an emeritus professor of public policy at Robert Gordon University, argued that the Winter Fuel Payment cut was “not self-evidently justified” in a blog post on his website on Tuesday.
“Pensions aren’t income-related. All pensions go to richer pensioners as well as poorer ones,” he wrote.
“... The Winter Fuel Payment is not really tied either to winter or to fuel. The cut in WFP is nothing more, and nothing less, than a cut in pensions.”
Pensions aren't income-related. All pensions go to richer pensioners as well as poorer ones. The cut in Winter Fuel Payment is nothing more, and nothing less, than a cut in pensions. https://t.co/paWrLCDRlb
— Paul Spicker (@PSpicker) September 3, 2024
The news comes after reports said that the UK Government would put the Winter Fuel Payment cut to a vote at Westminster, despite a Labour rebellion being on the cards.
Neil Duncan-Jordan, the Labour MP for Poole, has tabled an early day motion suggesting the move to make the benefit means-tested was premature, saying there is not “sufficient time to put in place a proper and effective take-up campaign for Pension Credit”, and calling for the cuts to be postponed.
On his blog, Spicker argued that it would “make far more sense” for Labour to bring in taxes on the state pension, which would only then affect people with high enough combined incomes.
However, he added: “They’re not doing that, because they came to office with an undertaking not to increase personal tax rates. Taking the money directly from pensioners may be different from tax, but it ends up in the same place.”
Spicker argued that claiming pension credits can be extremely complicated, pointing to estimates from 2022 which found that 37% of the people entitled to it do not claim it.
The expert, who has penned more than 20 books on social policy, also argued against means-testing the Winter Fuel Payment.
He wrote: “We already have one, comprehensive means-test for everyone with an income. It’s the tax system. Why create yet another complex, burdensome process to do the same job?”
Spicker argued for the Winter Fuel Payment to be left in place as a universal benefit, giving three reasons.
“First, the principle. The cut in WFP is a cut in pensions,” he said. “Is that merited? Pensions in the UK are markedly lower than pensions in many of the countries we’d use as comparators – which is why the ‘triple lock’ has been used, however slowly, to bump them up a wee bit. WFP is another way.
“Second, the value of having a distinct benefit … The best and most effective way to be able to respond to particular circumstances is to have a stand-alone benefit that can be added to other income. That’s the mechanism that the government is set to destroy.”
Spicker added that the Winter Fuel Payment system could be useful if the Government chose to give all pensioners a lump sum payment in future, noting: “An old rule about tax: don’t burn your instruments. You never know when you’ll need them.”
He concluded by arguing the economic case for the Winter Fuel Payment, saying: “The abolition of WFP is, crudely put, a cut in the disposable income of pensioners. That is also a cut in the financing of economic activities that the money would otherwise have been spent on.
“Far too many people in the UK are destitute. Markets don’t work if people don’t have the money to spend in them. There is a powerful case for increasing benefits overall.”
Elsewhere on Tuesday, Chancellor Rachel Reeves rebuffed calls to reverse her decision to cut the Winter Fuel Payment in a Westminster debate.
Reeves faced warnings from her own MPs and those on the opposition benches about the potential consequences of stopping the payments for people who are not in receipt of Pension Credit or other means-tested benefits.
The policy is expected to reduce the number of pensioners in receipt of the up-to-£300 payment by 10 million, from 11.4m to 1.5m , saving around £1.4 billion this year.
Labour MP Rachael Maskell warned the average rent rise in York of 11.9% exceeded the state pension rise by £380 this year.
She said: “With the loss of the cost-of-living payments and winter fuel payments, an increase in the energy price cap and cost of living, pensioners are frightened about how they’re going to keep warm this winter – as am I.”
