As I type these words early afternoon on this fine June Monday, the big political story dominating the headlines and the airwaves is more details on the government’s at least partial u-turn on winter fuel payments for pensioners.
The top story on the BBC website as I write this is ‘More than 75% of pensioners to get winter fuel payments as Reeves confirms major u-turn.’ The sub-head reads, ‘Pensioners in England and Wales with an annual income below £35,000 will now be eligible, reversing one of the government’s first major policies.’
Liberal Democrats are claiming this as a campaign win, understandably given how often Ed Davey has spoken about the issue at PMQs, not to mention campaigners across the country raising this matter locally and having it raised with them on the doorstep. I myself have dutifully repeated the party line on this when doing political punditry on TV.
But here’s the thing: are we right on this or are we actually mistaken?
Consider this for a moment. The changes announced by the Chancellor today means that a pensioner couple on a combined £70,000 a year will now get the winter fuel payment. As the i paper’s housing correspondent Vicky Spratt has said on social media today,
This is going to become increasingly harder to justify when young adults in work who earn less receive no support at all despite having higher housing costs.
before going on to say,
Winter fuel changes (those originally announced last year) may be an example of a good policy that was communicated very badly by Labour. Why didn’t they consult properly and discuss thresholds before dropping the announcement? The whole thing is such an obvious own goal.
Meanwhile, John Stepek of the Bloomberg daily newsletter Money Distilled tweeted,
The Winter Fuel Payment Allowance debacle is so emblematic of everything that’s wrong with the UK tax and benefits system, and policy making in general.
LBC presenter Ben Kentish posted,
Young person working all hours God sends just to cover the rent, whilst paying record levels of tax? Want to ever have a hope of buying a house? (Told to) Work harder. Over-65 enjoying the benefits of your private pension/dividends/property rent on your latest Mediterranean cruise? Great, here’s another £200 a year from the taxpayer.
Now that might be a rather stark way of putting it, but he’s right, isn’t he? Who will speak up for the young people of this country? Anyone? For young adults working really hard, but getting pretty much no help whatsoever?
I don’t like pitting old against young and I don’t mean to here, but it surely can’t be denied that politicians bend over backwards to help the former and largely ignore the latter. Dare I suggest it’s because older people vote more often? Or is that just me becoming very cynical in my middle age?
Now don’t get me wrong, I’m sure many pensioners who’d been cut off from support genuinely do need it and I certainly wouldn’t deny that. But a pensioner couple on £70,000? Really? Is that what our party believes?
How is that us living up to our pledge, as voiced in the pre-amble to the party constitution, to ensure that ‘no one shall be enslaved by poverty, ignorance or conformity’? Is it not special pleading for some who are actually really rather well off already? Isn’t means testing such a benefit the answer? To ensure that the poorest pensioners are rightly helped, but not giving vital taxpayer funded £‘s to the already well off at a time when the NHS, to name but one vital public service, is desperate for extra funding (as I talk about in my second item below) and creaking under the pressure it faces.
Food for thought at the very least, I hope.
Advocating for NHS funding to match European average
Early on Friday morning I made my debut on Sky News, being interviewed on its Breakfast show, in my capacity as a volunteer Patient Leader with the non-partisan pressure group Just Treatment, by presenter Matt Barbet. I was on to talk about the NHS and to give my reaction to a government announcement of £450m for emergency services, including ambulances.
Why speak to me about this?
Because my family knows to its great cost what can happen when these services don’t work as they should. Almost three years ago, on July 10th 2022, my dear mum Jackie waited an intolerable eleven hours for an ambulance after she fell at home (she said she’d hurt her ribs, so we followed advice not to move her). She died in hospital two days later after an infection turned to sepsis.
Since then, in her memory, I’ve been campaigning for better emergency care. In the interview on Sky I said,
We at Just Treatment believe that any investment is welcome, but is this extra investment as in new money or is this just coming from other parts of the health service and if it’s the latter we really worry about that.
Because we shouldn’t be robbing Peter to pay Paul.
It’s long been our view at Just Treatment that actually we need significant extra investment, now I know some of your viewers and listeners may say the NHS already gets a lot, yes it does, but it’s a very complex health service for a modern Western democracy serving tens of millions of people and our belief is the last Labour government, to be fair to them, took health funding up to the European average and that’s what we’re calling for at Just Treatment.
Of course there has to be reform too, but those in our party and beyond who say that the NHS doesn’t need significant and sustained extra investment are just not living in the real world.
I’ll keep campaigning for it in the hope that more families aren’t failed by the NHS as mine was.
Making Political Frenemies
As you may know I co-host a weekly podcast called Political Frenemies, available to watch on YouTube or listen to on multiple podcast platforms. Me and my Tory friend Chris (yes, it’s OK to have a friend you disagree with) discuss the fate of England’s four main political parties, have a robust debate, but remain friends at the end… hence the title Political Frenemies.
The current episode saw a first, however, as we welcomed a guest on to the pod for the first time, none other than LBC presenter (amongst many other things; author, pundit, former Tory candidate etc) Mr Iain Dale. Iain was a delight to talk to and gave us 90 precious minutes of his time, which we’re very grateful for.
We talk about his online spat last week with the vile Tommy Robinson; his new book on Margaret Thatcher; his views on the newish Tory leader Kemi Badenoch; and his brief stint as a member of the Liberals!
I hope you’ll give it a watch/listen and let me know what you think.
Thanks!
* Mathew Hulbert is a former Councillor, is a regular commentator on TV and Radio, and is Co-Host of the Political Frenemies podcast.
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14 Comments
Matthew Hulbert is right to question our celebration of the Winter Fuel Payment U-turn as a victory. When the payment was introduced in the late 1990s we criticised it as “badly targetted.” it was then and still is, and it has been embarrassing to hear out parliamentary party criticising its wholesale withdrawal rather than suggesting a more accurate targetting. Given that around a quarter of our children (maybe even more) are living in poverty, and disabled people suffering cuts in the PIPs that enable them to function with dignity, , it is frankly ludicrous to squander public money in this reckless manner simply in repose a well-financed PR campaign designed by enemies of the government.
There are roughly 10 million pensionerss. About a million of us are in real poverty, the next million or so probably need extra help and the remaining 8 million, of which I am one, are very comfortably off, thanks very much.
A claw -back rate well below £35 000 a year, or some other device, would make much more sense.
Our party would be much more credible if we took greater care to avoid jumping on to popular bandwagons. Remember, when Labour does well in the polls, so de we. We therefore need them to succeed. Helpful and constructive criticism should be the order of the day.
“When the payment was introduced in the late 1990s we criticised it as “badly targetted.” it was then and still is, and it has been embarrassing to hear out parliamentary party criticising its wholesale withdrawal rather than suggesting a more accurate targetting.”
What might the cost of a ‘more accurate targetting’ be?
How much trouble might it be to identify all those whose annual income (from all sources) is above the threshold?
Mine (I’m a little above the £35K threshold) is probably easy since my income (I’m long retired) consists of some pensions which the DWP knows about plus a small amount of savings interest which HMRC knows about. Probably easy to deal with. I haven’t been asked to complete a tax return for many years.
But what about people who are e.g. in and out of employment, maybe employed part time and maybe in multiple part-time jobs or just working for themselves?
It seems to me that if the payment was treated as taxable income – which as I understand it isn’t at present – then it ought to be quite easy to claw an appropriate amount back from better off taxpayers through the tax system. Along with some other payments such as the Christmas payment.
But as I understand it HMRC doesn’t gather the requisite information to do this.
Whether a pensioner couple receiving £60 000 are getting a fair net income from having put money into their pension over their working lives is a complex question that all political parties are happy to avoid. If you asked ten top politicians without access to the internet how much that couple’s net income is or what it should be then the spread would undoubtedly be greater than the value of Winter Fuel Payments (assuming you got a straight answer from at least two).
Nonconformistradical – you touch on a more general concern, which is the extent to which HMRC can expect to collect tax from those pensioners with some extra income to their state and personal pensions but do not complete a tax return.
Very careful consideration needs to be given to how we as a country proceed on this. On the one hand assessing whether or not people are eligible for support is tortuous and on the other those who are marginally in the area of needing to declare untaxed income probably either close their eyes to it or feel that completing a tax return is beyond them.
Politicians seem unable or reluctant to sit down and do the hard graft of creating improved systems and procedures.
@Graham Jeffs
“Politicians seem unable or reluctant to sit down and do the hard graft of creating improved systems and procedures.”
A problem not confined to politicians.
It seems to me that it applies in any situation where those in positions of authority or control never devote the time necessary to understanding how their systems work, whether the deseried objectives are achieved etc. – other than the profit amount if applicable.
Until and unkess they do that systems will become ever more complex and difficult to amend, more prone to errors.
Our tax systems badly need reforming – as I understand it they are stuffed with obsolete objectives and the instructions to achieve those objectives.
If we don’t start simplifying the tax systems they’ll just become ever more complex and error-prone.
@ nonconformistradical. There is indeed a cost to more accurate targetting. It can be intrusive, embarrassing and, as in the 1930s (and today regarding PIPs for the disabled) a source of bullying by officials.. That’s why the Labour Party, as representative of a battered and humiliated working class in the Depression years, is so keen to avoid means testing. However, it is hard to see a pensioner couple, able to earn up to £70 000 a year and still receive the payment, being embarrassed or humiliated if they over-reach this threshold and have to pay it back to e following year. I am not happy to see pensioners in this affluent situation, and those like myself in a more modest but very comfortable situation, mollycoddled whilst children and disabled people are genuinely suffering.
Sir Ed Davey’s response to Labour’s climb down: “Finally the Chancellor has listened to the Liberal Democrats and the tireless campaigners in realising how disastrous this policy was, but the misery it has caused cannot be overstated.” is clearly over the top, opportunistic and, in contrast to his informed and enthusiastic campaigning for care and carers, unworthy of the party that is heir to Beveridge and the abolition of the “Giant” of “Want.”
@Peter Davies. Assuming that their income is £30,000 apiece then their individual tax liability is £30,000- current tax allowance times 20%. The additional WFP would be taxed at 20%. If one of them earns over £35,000 the only one of them will get WFA and depending on how much the other earns WFA may be taxed.
It would be much simpler for WFA to be taxable and low earning pensioners would pay no tax and everyone else 20% to the extent that their income exceeds allowances.
Simpler still just to add it to the pension and let tax fall as it will.
@Mick. Yes. Rolling it into the pension (and pension Credit) is the obvious way to go. My point earlier was that there are sources of unfairness in the pension system that dwarf the value of WFA. In general, those who have put a bit aside or made NI contributions all their lives get very little more than those who have not. Those who have a lot put by are very well treated by the system.
Mick is absolutely right in his comment.
The only thing to add is that you build on your areas of strength.
We have one MP. He has several staff and a number of real activists. Ultimately it is their responsibility to put up a full sheet in all seats in the constituency. Then the job is to get as many as possible elected. After that it is to turn them into a team of Lib Dems. Then run the council well and repeat.
Tim Farron did that in Westmorland and Helen Morgan did it in North Shropshire. I’m sure David Chadwick can do it in Brecon and Radnor, so long as he focuses on his local community, much more than on the Westminster bubble.
They will then ensure he gets re-elected next time.
@Peter Wigley “That’s why the Labour Party, as representative of a battered and humiliated working class in the Depression years, is so keen to avoid means testing” I can’t say I’ve noticed any such reluctance. Their WFA changes are a perfect example of how keen they are on separate means tests for every benefit. It was the coalition that merged several means tests into one (Universal Credit).
Peter Davies. The real problem is the phasing out or reduction of of company and public sector pensions. Reform are claiming that pensions paid for by employees are ‘gold plated’. My teachers’ pension with just a smidgeon less than 40 years in it, gives me around £20k gross £16k net. Not exactly gold plated, even if it is bigger than the state pension. And I paid for it throughout my working life. It is final salary based, though people retiring now get only career average salary as a base for their pension.
Mathew and others writing here are not considering the rising cost of living which many pensioners as well as younger families find difficult to keep up with. Twenty years ago early retirement in your late 50s was considered acceptable, and even desirable to let younger people rise up the employment ladder. The final lump sum to invest, and the works pension, seemed more than adequate to keep middle-class people comfortable until the eventual old age pension would add to the comfort. I suspect that many retired middle-class people have been disconcerted to find that their regular income now seems adequate rather than comfortable, and were glad of the £200 or so extra to help them through the inevitable extra expenses of Christmas.
So it happens that many older people with common problems of increasing age, such as having to look after partners in declining health or pay towards their old parents’ increasing care needs, can find themselves financially stretched now, and unable to pay for or take the holidays they expected always to have. Those whose caring responsibilities have ended will often then find themselves living alone, and paying for services and keeping up the house (and maybe car) which once there were two people to share the cost of. Either way, there are many pensioners who will be really thankful for the extra £2- or £300 to help them keep going, whether it turns out a cold winter or not.
As Mathew says, a campaign win. But whose win? I have a few emails from – of all people, the Tories – about how the U-turn on the WFA is a massive victory for THEIR campaign.
Personally I’m disappointed: I feel that Labour’s decision to means-test WFA was a reasonable decision marred by being presented in a totally awful, incompetent, manner, and I agree with @Peter Wrigley about jumping on popular bandwagons against things that are actually sensible. At least for the LibDems, jumping on the anti-WFA-cut bandwagon was consistent with that the LibDems do typically call for more welfare and higher taxes. But that the Tories jumped on the same bandwagon and are now claiming victory for more Government expenditure on welfare was utterly hypocritical given they are supposedly a low-tax small-Government party. To my mind, that really shows the Tories out as – at least on this issue – opportunists who appear to have forgotten any principles.
Simon R “the Tories… have forgotten any principles”
“and if you don’t like them, they have others ” G. Marx