SIR KEIR STARMER sold himself to the nation at the General Election as the sensible grown-up in the room, but the winter fuel débâcle has cast doubt on the quality of the Labour leader’s political antennae. Axing cold-weather payments to pensioners just weeks before the Energy Price Cap rises by ten per cent looks extraordinarily inept.
Had it been part of an all-round austerity package in next month’s Budget, he might have glossed it with the rhetoric of “We’re all in it together.” But he has singled out the nation’s pensioners for punitive sacrifice — with no equality impact assessment or consultation with charities for the elderly — and, at the same time, has given above-inflation pay rises to trade unionists. It is, one Cabinet minister lamented privately, Labour’s pasty tax.
The logic was clear enough. Scrapping the allowance would underscore the twofold Starmer strategy of taking “difficult decisions” to establish economic stability while simultaneously exposing the ticking time bombs that the Tories had left inside the national coffers. But why, critics ask, has he not instead gone for taxing the rich or scrapping the now incoherent HS2 rail project?
It is not the policy that is the problem so much as its timing and implementation. Britain has 12 million pensioners, of whom 8.5 million pay tax — one in ten of them at the higher rate. This is a very different picture from two decades ago when Gordon Brown introduced the allowance. Then, almost 30 per cent of pensioners were in absolute poverty, a figure that has since halved. Today, many do not need a winter fuel subsidy.
That said, at the other end of the scale, roughly 1.9 million pensioners live below the poverty line on less than 60 per cent of the median national income. Of these, one in three do not claim Pension Credit, which would qualify them to keep the winter fuel allowance. The form that they have to fill in is 24 pages long and has 243 questions, and perhaps some of them are old-fashioned enough to still feel that stigma attaches to a state benefit. Then there are another million whose income is just a few pounds above the Pension Credit qualification, but who cannot afford to pay heating bills, which are treble what they were four years ago.
Age Concern estimates that more than two million pensioners will suffer real hardship this winter. The Joseph Rowntree Foundation says that the Government’s policy is likely to increase the number of pensioners living in poverty. When Theresa May was considering means-testing the allowance in 2017, the foundation estimated that 3850 pensioners were at risk of dying from the plan. Today, energy bills are far higher.
There is a range of solutions to Labour’s dilemma, without the need for a humiliating Starmer U-turn. The Government could scrap the allowance, but only for higher-rate taxpaying pensioners, or for those whose homes are in higher council-tax bands. It could set up a winter fuel fund (funded by a windfall tax on fossil-fuel companies) to which distressed pensioners could apply. It could bring forward next April’s state-pension rise to begin in November to cover the winter months.
The existing system may be unjust and unfair — but so is Labour’s current solution.