Mary Phillips, Chair
Southwark Pensioners Action Group (SPAG)
c/o Southwark Pensioners Centre
305-307 Camberwell Road
London SE5 0HQ
6 June 2013
Dear Mary,
Following Labour’s announcement on the 3rd June 2013 regarding future spending plans, including on Winter Fuel Payments, I’m writing to let you know my views on this important issue as there will be interest from pensioners groups across Southwark.
In 1997 when I was Secretary of State for Social Security, I introduced the Winter Fuel Payment. It was to pay every pensioner household a ‘one off’ payment of £20 for the winter period. Over the course of being in government we increased it to where it is now – a ‘one off’ payment of £200 for single or couple pensioner households over 60 and £300 for households where one or both partners is over 80.
When we came into government in 1997, there was a massive problem of pensioner poverty. Pensioners were more likely to be poor than any other section of society and we set about changing that including with a big increase of support for the poorest pensioners through the pensioners "minimum income guarantee". Part of the problem of pensioner poverty was elderly people not being able to afford to heat their home.
We introduced the Winter Fuel Payment because we wanted to tackle fuel poverty for the poorest pensioners. Most pensioners then were poor so it made sense to do it on a universal basis - and avoid the expense and stigma of means testing. It worked successfully alongside other measures to help tackle pensioner poverty.
Since then, for many reasons, there is now a segment of pensioners who are well off. So it makes sense, especially when the public finances are under great pressure, to prevent the best-off pensioners claiming it.
That’s why I strongly back restricting the Winter Fuel Payment to those whose income is less than £42,000 a year. This is about 95% of pensioners who are on middle and low incomes and they will continue to get the Winter Fuel Allowance.
This is not the breach of any principle. Some payments are means-tested, some are based on contributions, and some are given to everyone (universal payments). All three ways of paying are different and used for different reasons - they are a means to an end.
The objectives are to ensure that help goes to those who need it. If you pay in you can get out. And that there are some things which everyone should get irrespective of need and even if they haven't contributed - such as the NHS.
Limiting the Winter Fuel Payment to those living on less than £42,000 a year does not mean that we think that all pensioner support should be restricted in that way. For example, free TV licenses only go to the over 75's who include most of the poorest pensioners. The free bus pass doesn't cost much as the buses are running anyway - they don't run extra buses for pensioners. And it helps with physical and mental health by encouraging pensioners to be out and about and not become house bound and isolated.
So I think the Winter Fuel Payment for all pensioners was the right thing to do when I introduced it. But now I think it’s right to restrict it and not allow those who really don't need it to be entitled to it.
I would of course be grateful for your views.
Best wishes,
Harriet Harman MP