Winter deaths are too serious for political football
There is apparently no benefit that riles the right, nor those across the political spectrum campaigning for intergenerational justice, more than the Winter Fuel Payment (WFP) for pensioners. The benefit costs the Exchequer just over £2 billion per year (compared to around £76 billion on state pensions).
As such, the Work and Pensions Secretary continues to use WFP for political points-scoring.
His main target is the imagined foe of ‘welfare dependency’, but his stance also indicates a struggle within the Conservatives over cuts strategy, with the Prime Minister committed to defending all pensioner benefits in fear of the wrath of the grey vote.
Too often the facts behind WFP provision are not rehearsed in public debate. The benefit was not introduced as a pensioner ‘bung’, as it has been described by employment minister Lord Freud, even though it did prove very malleable to stealthy increases by the Labour government. It was introduced, in fact, to deal with the extremely serious problem of excess winter deaths – deaths brought about by cold weather would otherwise have been preventable.
Cold costs lives, especially among the older population. There were around 24,000 excess winter deaths in 2011/12, mostly people aged over 75. Cold also costs money, as it causes and exacerbates treatable illnesses, putting strain on the NHS.
Crucially, a report by the Strategic Society Centre (SSC) last month showed that the WFP is vital in mitigating this impact. Contrary to popular mythology, the benefit succeeds in directly increasing household expenditure on fuel in the age group most at risk of cold-related illnesses.
The money could be given to pensioners by other means, but (a) it would still need to be universal or near-universal, given the extent of fuel poverty among older people. And (b) if the equivalent amount were simply tagged onto the state pension, IFS research shows it would become a far less effective measure against excess winter deaths, because it would be less likely to be spent on fuel. This approach would remove a very important nudge, and would mean that only 3 per cent of the payment would be spent on fuel, compared to around 40 per cent at present.
The SSC report argues therefore in favour of maintaining the WFP, as well as a whole range of further measures for addressing excess winter deaths (which may in time make WFP less necessary). It also suggests some modifications, such as taxing WFP (which is actually Liberal Democrat policy – okay in so far as it only affects the 15 per cent of pensioners who pay income tax, but problematic if it means more pensioners have to go through self-assessment to prove they do not have to pay their WFP back).
Their other suggestion is paying WFP only to people aged above 70, to better target those who spend the payment on fuel. Of course, this may harm pensioners of all ages who rely on the WFP to pay for things other than fuel, in the context of a meagre state pension.
An evidence-based review of the WFP, with a view to sensible changes over the long-term as the pensions system evolves, should not be a no-go area for progressives. But Iain Duncan Smith’s game of political football over a much-misunderstood but much-needed benefit should be avoided at all costs.