Opposing the new Labour Government’s cynical and unnecessary cuts to the Winter Fuel Allowance

I’m sure that it will not be a surprise to anyone that last week that the UCU Disabled members Conference debated the new Labour Government’s cynical and unnecessary cuts to the winter fuel allowance.

The Government has made great play on the fact that there are many pensioners who are not claiming the ‘Pension Credit’ who could claim it. What they fail to point out is that the threshold for claiming Pension Credit is a weekly income of £332.95 for a couple and £218.15 for a single person.

The current state pension is £221.20 per week for a single person and double that amount for a married couple. Both of these figures are above the threshold for claiming ‘Pension Credit’. The reality is that anyone who qualified for State Pension since April 2016 will not qualify for ‘Pension Credit’ if they have achieved the full number of qualifying years for the state pension which currently is 35 years.

Those who can claim the ‘Pension Credit’ are those who are not on full state pension because they do not have enough qualifying years and those pensioners who are over 70 years old and who started drawing their pension before the new state pension started in April 2016.

The other important fact that the new Labour Government chooses to overlook is that many pensioners will not claim benefits, even if they are entitled to them. For them the shame and stigma of claiming benefits is too great to bear, but they were happy to receive the winter fuel payment.

The debate on the motion Opposing Cuts to the Winter Fuel Allowance was opened by Martin Giddey from the UCU Southern Retired Members Branch who moved the motion. Below I quote directly from Martin’s speech that he has kindly shared with me.

“I am sure that you are all now quite familiar with the issue of cuts to the winter fuel allowance. This highly controversial policy has been widely condemned by opposition political parties, trades unions and voluntary sector groups such as the National Pensioners’ Convention and Age UK.

It is a particular concern for older people with disabilities and long-term medical conditions, some of whom are particularly susceptible to the cold and require extra heating. With the UK state retirement pension amongst the lowest in Europe, the loss of £200 or £300 for essential heating will place thousands of vulnerable people at risk.

The motion before you today articulates three critical perspectives.

1. First, policy criticism. There was no consultation process and no impact assessment prior to introducing this measure. This suggests that the government had anticipated that the policy would be widely condemned, and that ministers were indifferent to the serious human suffering that would ensue.

2. Second, political criticism. Our government has chosen to save money by targeting older people, many of whom have low incomes, rather than looking to those who are well-off. Is this really the action of a ‘government of service’ (to use Keir Starmer’s description)? Or does it indicate a government that is essentially unconcerned about growing inequalities of wealth and the scourge of poverty in the UK?

3. Third, moral criticism. Government rhetoric has been characterised by a lot of very distasteful ‘macho posturing’, reflected in ministers’ enthusiasm for taking ‘tough choices’ and ‘hard decisions’. Isn’t this such an easy boast to make when those ministers do not face the misery of a cold home and sometimes having to choose between heating and eating?

At Labour’s annual conference in September the Chancellor of the Exchequer said that ‘there would be no return to austerity’. Our message to Rachel Reeves must be this. For disabled people and vulnerable pensioners (and indeed for everyone on a low income) austerity has never gone away and this appalling policy makes austerity even worse.”

Let me reinforce the arguments that Martin was making by quoting some of the relevant statistics.

Pensioners have already suffered under austerity and the cost-of-living crisis in the following ways:

• The personal tax-free allowance on the state pension has been frozen at £12,570 since 2021. The current government policy is to keep it frozen until 2028. We should remember that freezing personal tax allowances is in effect a tax increase.

• Free TV Licences for pensioners were abolished in 2020.

• The cost of energy will go up around £149 this year, with pensioners and the disabled, who need to use their heating more consistently than other households, being hit even harder.

• Many pensioners will experience rent rises above increases to the state pension. Average rents shot up 8.4% in 2023/24, with some areas being hit even harder.

• The UK state pension is worse than in most other developed countries, and the UK devotes a smaller percentage of its GDP to state pensions and pensioner benefits than most other advanced economies.

• UK pensioners are around 10% worse off than the OECD average.

• Severe cuts to local government services since 2010 mean pensioners now have less access to affordable and high-quality social care.

As a member of both UCU and Unite I am proud that Unite are bringing a legal challenge to the new Labour Government by seeking a Judicial Review, to overturn the government’s decision to cut winter fuel payments to all but the poorest pensioners. Let us remember that:

• 90% of pensioners will lose the Winter Fuel Payment (WFP). There are nearly 13 million people claiming the state pension in the UK and only 1.4 million of these receive pension credit, which entitles them to keep the WFP.

• A single pensioner with an income of just £220 per week is not eligible for pension credit, and therefore loses their WFP.

• 780,000 pensioners who are eligible for pension credits but don’t claim them are also expected to lose out.

• In total, around 2 million pensioners in poverty will no longer be eligible for the payment. These include low-income pensioners above the £220 threshold, and those who have unavoidably high energy needs because of disability or illness.

• An estimated 1.6 million disabled pensioners will be losing their payments, according to a Freedom of Information (FOI) request to the DWP.

• The government claimed that no impact assessment was ‘legally required’ before making the changes. MPs have said there was a clear moral requirement for one.

• Labour’s own research from 2017 suggests cuts to the WFP could result in the death of 4000 pensioners. When the cut was originally proposed by the government of Theresa May, Labour called it “single biggest attack on pensioners in a generation in our country”.  This is an example of the hypocrisy of the new Labour Government, say one thing in Opposition and do the opposite in Government.

The decision to cut winter fuel payments had nothing to do with making ‘hard choices’, there were different and fairer choices that the new Labour Government could have made.

• There is a massive untapped wealth in Britain. The 50 richest families in Britain own a combined £500 billion in wealth - the same as half the UK population.

• A 1% wealth tax on the richest in society who have over £4 million in assets would raise £25 billion. That sum dwarfs the £1.5 billion Labour hopes to raise by picking the pockets of pensioners.

• The super rich are currently taxed less than workers. Income from unearned wealth like the sale of assets is taxed at a lower rate than earned income from work. The richer you are, the more of your income is from investments, the lower effective rate of tax you pay.

• Universal welfare measures, like the state pension itself, stop people falling through the cracks. By excluding two million low-income pensioners, this cut is badly planned on its own terms. There are plenty of alternatives to the cut, including wrapping the WFP into the state pension, which would mean some of it would be recovered by higher taxpayers. Alternatively, it could be linked to a much wider range of benefits. However, these alternatives are not needed: universal winter fuel payments could comfortably be afforded through a wealth tax.

• In opposition Labour backed the proposal for a ‘Windfall Tax’ on utility and energy companies that made excessive profits which would result in billions of pounds being available to the Government

The new labour Government needs to review its priorities and refocus its efforts.

Isn’t it time for the Prime Minister and his new Labour Government to turn their fire on large corporate companies and billionaires who don’t pay their fair share of tax?

Isn’t it time for him to introduce the ‘Windfall Tax’ which he promised before the General Election?

Where is the action he promised against those companies making excess profits?

The decision to Cut Winter Fuel Payments was a political decision not an economic decision!