Social Fund Winter Fuel Payment Regulations 2024

Wednesday 11th September 2024 Lords Chamber

Motion to Annul

17:02

Moved by

[Baroness Altmann]

That an Humble Address be presented to His Majesty praying that the Social Fund Winter Fuel Payment Regulations 2024 (SI 2024/869), laid before the House on 22 August, be annulled because they would significantly reduce state support for pensioners without sufficient warning and without a proper impact assessment, and because they present a significant risk to the health and wellbeing of many pensioners on low incomes.

Relevant document: 2nd Report by the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)

[Baroness Altmann (Non-Afl)]

My Lords, I would like to say from the start that I believe the noble Baroness opposite is a very, very good woman and I hope that the House will forgive me in some way for bringing this before your Lordships. But I have spent my life trying to stand up for people who have no voice and trying to do what I believe is right. On this particular occasion, with a heavy heart, I believe I must do so.

Let me read some of the words of those people from whom we are taking away £200 or £300 this winter. These are the poorest pensioners. We will hear that the Government is protecting the poorest. It is simply not the case. I apologise, but that is the reality. “I do not qualify for pension credit. I live on my state pension and one small occupational pension that pays me the cost of a couple of bags of carrots and potatoes a month in an annuity. I receive just a little over the qualifying limit and fall into that group of pensioners who are in limbo. I am 75 years old and not in great health. I will be trying very hard not to turn my heating on this winter. I have only a few pounds a week for food, toiletries, insurance or any other repairs. Why is this being done? I always turn off the lights and am very careful, but I don’t know how I will get through the cold weather this year. I have arthritis and COPD and need to keep warm for my health.”

Another says, “I am 82 years of age and live alone. I am on £220 a week state pension and therefore £2.85 a week over the pension credit limit. Since the cost of living crisis, I have not been able to afford any central heating for the last two winters. I did not put on my gas central heating and I will not be putting it on again this year. My welcome winter fuel payment went towards my electricity bill, which increased due to the single room heater I used. I work on the ‘heat the person not the room’ principle. I fall into that group of pensioners who do not qualify for pension credit, and I am not sure how I can economise further”.

One more example says, “I am 91 years old and my husband and I struggled to keep our home warm enough last winter. The fuel bills rose so much, and even though our home is small we were spending so much on heating that we only had the heating on in the sitting room and our bedroom. He had Parkinson’s and I have had cancer, but we looked after each other. We spent our time in the one room downstairs and used lots of blankets, as well as often having three cardigans on. We went to bed early so we could turn off the heating, and would try to keep the heating off in the bedroom most of the time, but we would cuddle up together to keep warm. My husband passed away a few months ago and I don’t know how I will manage this winter. I don’t have enough money to warm the house more, and my small pension has put me over the limit for pension credit”.

This is the reality of the statutory instrument we are debating. I agree with the Government’s aim of removing a tax-free payment from millions of people who do not need it. Indeed, I have called for that to be done for a long time, or for it at the very least to be taxed: it could perhaps be rolled into a higher state pension but then become taxable.

I would support this measure if it was dated 2025 instead of 2024, giving time to put in place some mitigation and protection for these poorest pensioners. Those on pension credit are not the poorest as they get extra help—as the Minister herself has said, some get thousands of pounds extra. It is those who are just a few pounds a week above the limit or those who are eligible but do not claim or receive it who are the poorest. Nothing in these regulations will ensure they receive the money they expected, which has been withdrawn from them with no warning or time for them to economise in time for November, when it was due, or for the colder weather this winter.

I believe that the Government do not want to hurt these people. I do not expect that the needs and situation of these very poorest pensioners were really considered when this announcement was made. The aim, which I fully endorse, was to take the winter fuel payment away from the quarter of pensioners who have assets worth £1 million, and from those higher up the income scale, who clearly can manage without it. But that is not the impact that I am concerned about if we pass this measure today.

I am particularly concerned because of the wording in the statutory instrument document itself:

“A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, public or voluntary sector is foreseen”.


If that had been the expectation, since that publication the voices of Age UK, Independent Age, Silver Voices and the trade unions have all warned clearly that what the Government perhaps did not foresee is indeed foreseeable and potentially about to happen.

The Government’s Explanatory Memorandum says:

“No consultation was undertaken ... Whilst making the necessary Exchequer savings, it retains support for pensioner households on the lowest incomes”.


This is simply not correct, and I am trying to help the Government see that what I believe they do not wish to do, they may not need to do. I understand that there are pressures on the public finances, and I completely support the idea that a universal payment to those who do not need it, especially one that is tax-free, should not be made. Why not work out a system whereby they do not receive it, but the consequence of taking it away is not that we also have to take it away from perhaps 3 million of the poorest pensioners in the land?

The Secondary Legislation Scrutiny Committee has brought this issue to the attention of the House:

“We are unconvinced by the reasons given for the urgency attached to laying these regulations and are particularly concerned that this both precludes appropriate scrutiny and creates issues with the practicalities of bringing in the change at short notice”.


That is the problem I have, the short notice. It is not the aim of the policy that I query: there is no time to prepare, no time to increase pension credit—although that is a worthy aim, and I hope a few extra people will claim it. According to the Government’s own figures, more than 800,000 households are eligible but not claiming. The idea that they will receive the money this winter, having gone through the 243 questions on the application form, be approved and start receiving it, is simply fanciful. With the best will in the world—and I believe the Government have the best will to try to increase take-up—even if half the households were to receive it, the savings the Government say are so essential to make will be wiped out. This argument does not make sense. It is not logical to say that we have to take it away from the poorest because we want to take it away from the well-off.

Taking this money from people is, effectively, a 3.4% state pension cut this year. For anyone on the old basic state pension who is over 80, £300 is 3.4% of the money they received from the Government last year. This measure was introduced in 1997 and it has been an essential part of the state pension support package for pensioners ever since. No Government have said it will be removed; indeed, that was suggested and rejected time and again. I believe there could, and will, be a way of dealing with this. For example, to save money, you could tax it rather than axe it; or you could just say that anyone paying higher rate tax will have their tax coding adjusted and the money will be taken back from them. If you pay 40% or 45% tax, of course you do not need it.

17:15

I do not need the money. I have long said that the payment does not make sense. When I was director-general of Saga, I arranged a scheme whereby any of our Saga customers who did not want or need the money could donate it to the Surviving Winter charity appeal to help poorer households survive through the winter, or perhaps to help them with a new boiler. The charity does different kinds of work, not just for pensioners; it would be across the piece. That so many people donated this money was a demonstration of the fact that it was not well targeted. I do that myself, and I declare an interest in that my measure would retain money that I get that I do not need, and of course many noble Lords around the House do not need it, but that is not the point.

We all have a choice. This is a choice—to take money from the poorest pensioners in our country just as winter is approaching and energy bills are increasing, to save a paltry, in global terms, £1.4 billion this year. I cannot think of a sufficient justification for us to approve this measure today. I have not seen any case that stands up to scrutiny being made by the Government to justify it, such as the idea that not saving £1.4 billion this year would somehow crash the economy or undo the national finances. I urge the Government to think again. I am happy to work with them on the mitigation measures that could and should be put in place to carry out this policy, with which I agree overall, if it is done in the right way. I do not get the urgency.

Adding insult to injury, the fact that pensioners in Spain, Sweden and elsewhere in EU will still receive this money has been mentioned by a few of those writing to or messaging me. On rational, logical, compassionate grounds, I urge noble Lords to think carefully about what we could be doing, which is protecting the poorest pensioners through the winter who are otherwise going to be left at risk. I beg to move.

[Baroness Stedman-Scott (Con)]

My Lords, this is the first opportunity I have had to congratulate the noble Baroness, Lady Sherlock, on her appointment as a Minister. I genuinely wish her well in that capacity and look forward to working with her on areas where we can.

The Government’s decision to end the winter fuel payment for all pensioners except those in receipt of relevant benefits will be a real blow to millions of older people across the country this winter. Reducing financial support for older people before the colder months will harm many who rely on their winter fuel payment. This is a betrayal on a shocking scale. The Opposition are critical of this policy for three primary reasons: it will leave millions of vulnerable pensioners worse off this winter; the Government are wrong to prioritise above-inflation pay rises for public sector workers over the interests of vulnerable older people; and the Government were not straight with the British people about their plans during the general election this year. The Government should listen to the concerns of noble Lords and take time to consider how they can make the savings they need without punishing older people. That said, it is not the place of this House to override the decision of the elected House, and that is why the Opposition have tabled a regret Motion today.

In government, the Conservatives showed a stalwart commitment to pensioners who had paid in all their lives, with the triple lock, pensioner cost of living payments, the warm home discount and winter fuel payments. All these measures were either introduced or maintained by the Conservatives because we on these Benches know what is right for pensioners and that it is patently unfair to put the most vulnerable pensioners in jeopardy as winter approaches. The Conservative Party consistently did what was right for pensioners throughout our time in office, and there are valuable lessons for the Government in that record.

The winter fuel payment has been a lifeline for millions of pensioners, with 11.4 million older people receiving it in 2023. Vulnerable pensioners rely on this support, and it is that group about which the Opposition are most concerned. The Government have said that pensioners in receipt of relevant benefits will continue to receive winter fuel payments, but the Government’s own estimates show that approximately 880,000 households are eligible for pension credit but do not currently receive it.

It is important that we remember just what position those 880,000 people are in. To be eligible for pension credit, a single person must have a weekly income of less than £218.15; it is £332.95 for a couple. These are some of the most vulnerable people in our society and I ask the Minister: is she comfortable depriving 880,000 of the most vulnerable pensioners of the winter fuel payment this year?

In April this year, the now Prime Minister, writing in the Daily Express, said:

“I firmly believe that if you spend your lifetime working hard and contributing to society, you deserve a comfortable, secure retirement”.


He went on to say:

“It was that belief that meant the last Labour government introduced winter fuel payments, free bus passes and pension credits”.


Please can the Minister tell us in detail what has changed from that statement?

I trust noble Lords will forgive me if I pre-empt the Minister’s reply. We will hear, no doubt, that the previous Government left office with a £22 billion black hole in their public finances. This is not a fair statement of facts. When the Chancellor of the Exchequer stood at the Dispatch Box in the other place, setting out the Conservatives’ supposed profligacy, she included in that calculation a total of £9.4 billion of spending on public sector pay awards. The Chancellor claims that these were a result of Conservative decisions, but they are political choices. It is not a fair presentation of the facts to say that the Conservatives are responsible for a £22 billion black hole when almost half of that calculation is made up of public sector pay awards agreed by the Government.

Ministers have also claimed that the public finances were worse than they expected when they took office earlier this year. I need not remind the House that the Office for Budget Responsibility, which was founded under the Conservative Government, audited the public finances just 10 weeks before the general election was called. Indeed, since January this year the then shadow Chancellor, in line with constitutional convention, had privileged access to the Treasury Permanent Secretary. The books were open, yet the now Government did not come clean during this period about their plans to remove the winter fuel payment for most pensioners.

Indeed, if the public finances were as tight as the Chancellor would have us believe, Ministers would be showing pay restraint across the board. In fact, the truth is quite the opposite. Since taking office, the Government have allocated £8.3 billion for GB Energy, £7.3 billion for a national wealth fund and, of course, the £9.4 billion I spoke of a moment ago for vast above-inflation public sector pay awards. It is becoming clearer every day that the Government will prioritise train drivers, junior doctors and civil servants—their own political vanity projects—over the needs of the most vulnerable pensioners in our society.

In addition to these concerns, we must ask the Government whether this policy change will be successful in achieving its stated aim. During Treasury Questions in the other place last week, the Chancellor of the Exchequer confirmed that the Government expect to raise £1.5 billion a year by cancelling the winter fuel payment for the majority of pensioners. This led me to look up the total value of unclaimed pension credit. The latest official statistics show that up to £2.1 billion of available pension credit went unclaimed. If 100% of eligible pensioners claimed their pension credit, the Government would make no saving at all. We can conclude that the fact that 880,000 pensioners who are eligible for pension credit will be deprived of their winter fuel payment by the Government is not an unintended consequence. The savings the Government expect to make are predicated on those people not claiming.

We on these Benches put in a great deal of effort to drive up pension credit when we were in office. In June 2022 the Pensions Minister launched a campaign to urge pensioners to check whether they were eligible. In June 2023 the then Pensions Minister, Laura Trott, launched a further campaign and trialled the Invitation to Claim initiative through which the Department for Work and Pensions wrote directly to potentially eligible households that received housing benefit, encouraging them to apply. In July 2023 the DWP confirmed that these campaigns had been effective, and applications were around 75% higher in the year to May 2023 than in the same period the year before.

We have made progress on this in the past, and the Government’s new campaign is unlikely to succeed in getting every eligible person to claim pension credit. The Government should listen carefully to these concerns and take action to protect this vulnerable group.

While it is unlikely that we in this House will be able to convince the Government to change their chosen course—although I live in hope—I hope that the concerns raised by Members across the House will at least encourage Ministers to work on mitigating measures to ensure that pensioners eligible for pension credit are not left without the support they need.

I know that many noble Lords would want me also to highlight the needs of pensioners who are only just above the pension credit threshold. My friend, the noble Baroness, Lady Altmann, has already done this. Can the Minister confirm whether the Government have considered increasing the pension credit threshold so that pensioners in that group are protected?

Before I conclude, I ask the Minister whether she will commit—I implore her—to meeting concerned Peers to discuss other options to this policy, to suggest ways to make the pension credit uptake campaign more effective and to explore the alternatives. I know that noble Lords would appreciate the opportunity to engage with the Government constructively to protect the most vulnerable pensioners.

In conclusion, it is clear that the Government have the wrong priorities, putting public sector workers and their own vanity projects first while depriving vulnerable pensioners of a lifeline. Indeed, the Prime Minister is damned by his own words earlier this year, when he said he believes pensioners “deserve a comfortable … retirement”. This Government took office on a change theme, which we are so encouraged by, and said they would make money so that everybody would be better off and have a better quality of life. As yet I have not seen too much of the making of money, but I see a lot of taking and I hope it is not a trend that will continue.

[Lord Palmer of Childs Hill (LD)]

My Lords, I rise to speak to the Motion standing in my name, the third of the Motions on the Order Paper today. In doing so, I must stress sympathy with the sentiments spoken of so well on the Motion from the noble Baroness, Lady Altmann. However, I understand from reading the House that there is not a lot of support in your Lordships’ House for the fatal Motion—although, as I say, I have great sympathy with it.

My Motion calls attention to the most vulnerable pensioners, many of whom will lose support just as energy bills are set to rise again. About 10 million pensioners will lose winter fuel payments of up to £300 because of the decision taken by this Government, after years of Conservative mismanagement that has left the public finances in crisis. But this is the wrong answer to the challenges we face: it is clear that many pensioners rely on a winter fuel payment, which is not a luxury.

17:30

This cut will leave about 2 million people worrying how they will afford their energy bills this winter. I am sure I am not alone in having just received a message from my energy supplier that there will be a significant increase in costs. For many it will be a choice of eating or heating this winter. Age UK has condemned the cut as being introduced

“with virtually no notice and no compensatory measures”.

My personal view is that winter fuel payments could have been kept universal but been taxed. The Government have chosen not to go down that path or to take other measures that would have protected some of our most vulnerable pensioners—so, as the noble Baronesses have said, we are having to focus on pension credit, which goes only to those who have a weekly income of up to £218.15, or £332.95 jointly if they have a partner.

A crucial part of my regret Motion is that the changes rely on take-up rates for pension credit. Around 1 million eligible pensioners do not claim it. The Motion in my name stresses the need to identify and deal with low take-up—I have a feeling that the Minister would agree with that. DWP has made calculations of achieving an increase in take-up but, even assuming its optimism is justified, that will still leave us with about 700,000 eligible pensioners not getting pension credit, and thus with the double whammy of not getting winter fuel payments.

People are asking: why do they not claim? Is it pride or lack of awareness? Is it an inability to cope with the system? How many of those eligible will be deterred by having 140 to 200 questions on the application form? Is an estimated saving of £1.4 billion realistic if the Government are successful in drastically increasing the number of those eligible to claim? We know that pension credit claims can take many months to be processed. My Motion seeks assurances, which I hope the Minister will give, that delays will not contribute to even more pensioners going cold this winter.

My Motion also calls for more support for vulnerable pensioners this winter, not only those who are eligible for pension credit but others who are vulnerable. Policy in Practice has estimated that around 130,000 elderly people miss out on pension credit because they are just £500, or £9.61 per week, over the income threshold to claim the benefit. These are tiny sums and the Government must take action to tackle this unfair cliff edge that they have now created.

In my Motion we are calling on the Government to take a different approach. It calls for steps to be taken to identify those eligible for pension credit. It calls for more winter support for pensioners, not only those eligible for pension credit. It calls for an end to fuel poverty, perhaps by an emergency insulation programme and a windfall tax on profits from oil and gas companies. If there is a financial crisis, the load must be spread to those most able to shoulder the burden. Let us move on from the world of Ebenezer Scrooge, a cold-hearted miser, and, like him, seek redemption by voting in favour of my regret Motion.

[Lord Davies of Brixton (Lab)]

My Lords, these regulations are a mistake and I want my concern on the record. I want to make it clear from the start that the financial mess inherited by our Government is a result of 14 years of austerity and financial mismanagement, and I reject any suggestion that public sector workers are benefiting at the expense of pensioners. That is simply a crude attempt to divide working people, and we should reject it as such. I will therefore vote against the cynical regret Motion from the Official Opposition, and I say to the noble Baroness, Lady Stedman-Scott, that she does herself no favours attaching her name to the Motion.

There are several key points I wish to make. First, even if the case for austerity measures were accepted, the cut in winter fuel payment was not a necessary element in the July package; it was a choice. Secondly, whatever steps are taken to increase the take-up of pension credit, millions of the poorest pensioners will still suffer from an increase in fuel poverty—Age UK came out yesterday with a figure of 2.5 million. Thirdly, the effect of the triple lock should not be double counted and, in any event, it will fail to offset the effect of the cut in the winter fuel payment over the lifetime of the current Parliament. I urge the Government, even at this late hour, to hold back on any change, pending full consultation on an alternative approach to tackling fuel poverty, while retaining the advantages of a universal benefit.

It is important to understand more about why the Government wanted to include the measure in the July package, despite its obvious political downside. Unlike other possible options, it achieved in-year savings and used an existing structure for means testing the benefit, rather than having to create a new structure. However, they failed to appreciate the two adverse consequences of using the pension credit means test. First, it has a ceiling that everyone agrees is far too low. Secondly, there is no form of marginal relief, as it is not relevant for the purposes of means testing pension credit.

In response, the Government—my Government—have attempted to head off the widespread opposition to the regulations. First, they have argued that the winter fuel payment had to be cut as part of the July package to make the figures balanced. Secondly, they have argued that the impact would be offset by increasing the take-up of pension credit and, thirdly, that the impact would be ameliorated by the existence of the triple lock on the state pension. All of these arguments, regrettably, fail.

First, the cut was not necessary, even as part of the July package. There is of course a debate to be had about the need for austerity, particularly as an instant response. However, even if the need for the July package were to be accepted, the question as to whether it had to include the cut in the winter fuel payment is a separate issue. Posed in those terms, it is obvious there is no a priori reason that it had to be a necessary element of the package. Whatever risks the Government faced, they were addressed by taking the package as a whole and not by its individual elements. Despite the Government’s protestations about tough choices, there is no avoiding the fact that it was, nevertheless, a choice, thereby raising concerns about their attitudes to universalism and pensioners in general.

The second issue is pension credit, which other speakers have addressed. We know that the increase in the take-up of pension credit will be limited. It is important to acknowledge what the Government are doing to increase the take-up of pension credit, but, regrettably, there is a long history of ineffective take-up campaigns for means-tested benefits, going back to the 1940s, for national assistance, and beyond. There is no evidence that we now know more than they did in the past about how to overcome the intractable problems arising from stigma, complexity and a lack of knowledge. I am sure other speakers will go into detail on that.

My third point is about the triple lock, which does not offset the impact of the cut in the winter fuel payment. The Government suggested—not today but in other commentaries—that the triple lock increases to the state pension over their term in office would

“outstrip any reduction in the winter fuel payment”.

Unfortunately, this is an obvious case of double counting. I have done the sums, and almost all the pension increases that will occur over the coming five years are required to protect pensioners against the impact of inflation. Pensioners cannot spend that money twice, covering both increases in the cost of living and at the same time replacing the winter fuel payment. The purpose of the triple lock is to protect pensioners against inflation, keep state pensions in line with general living standards and nudge the pension gently upwards. I have calculated that, based on the latest OBR assumptions, the impact of the triple lock, taken by itself, means that the new state pension and the basic state pension will be barely 1% higher than they would have been, even with the statutory minimum increases. This is less than the winter fuel payment, which pensioners are losing because of this measure.

In all the debates on the cut in the winter fuel payment, I am not aware of anyone arguing that there is no case for change. The winter fuel payment is and always was an anomalous benefit, particularly as it affects high earners. A payment that, in practice, recipients can choose to spend as they wish should always have been included in taxable income. The fact that it was not is a historical accident, arising from how and when it was introduced, rather than a clear policy decision.

I therefore agree with the 2015 Labour manifesto, which said:

“We will stop paying Winter Fuel Payments to the richest five per cent of pensioners”.


That was the right policy then, and something like it is the right policy now. In other words, those with the broadest shoulders should bear the burden of the cut, rather than the millions of the poorest pensioners who struggle to make ends meet. Given the case for change, the Government at this late stage should hold back on the cut to the winter fuel payment, pending a full consultation on an alternative approach to tackling fuel poverty while retaining the advantages of a universal benefit.

[Lord Desai (CB)]

My Lords, there seems to be rather a hurry to embrace economic rationality on the part of the new Government. We know what economic rationality always says: cutting income tax for the rich is good policy because that encourages growth, and cutting the benefits of the poor is good policy because that balances the budget. All through economics—the science that I teach—there has always been this root. The poor must be made to suffer because, as Malthus pointed out, if you give them more money, they will only breed more children. That is no good. Giving money to the poor is a loss, but give money to the rich and the rich will benefit.

I imagine that there is an idea that a big hole in the fiscal accounts was suddenly discovered. I do not think so: I think we all knew there was a fiscal hole. We have all been through the pandemic and through the last 15 years, when the economy has had a very low growth rate—in fact, practically no growth rate. We know all that. We also know the public accounts numbers that were available giving us the ratio of deficit to GDP. None of this was a surprise. If you want to really tackle the deficit, you need a 10-year horizon to do it. Do it rationally; do not do it quickly, do not do it in a haphazard fashion and do not just immediately say, “Oh, I have to make a very tough decision”. As soon as a politician says “tough decision”, you know the poor are going to suffer.

17:45

It is a tough decision not to allow the people on universal credit to have more than two children. Why? Why have the Government already decided to continue with the two siblings decision? They have done so already. Why have the Government already decided to punish old-age pensioners? The one thing that Gordon Brown did, way back in 1997 when he introduced this winter fuel payment system, was to introduce a rare universal benefit for all elderly people. It is a very rare thing to be able to do that and to be able to afford it—and for all these years we have afforded it. All these years, we have afforded it and, if anything, we may not be as rich as we would like to be, but we are not poorer than we were in 1997.

The Government need to really explain this to people properly. Do not say all this about tough decisions—all decisions are tough. We have to be absolutely clear exactly why the cut-off point was chosen in the way that it was and, as previous speakers have said, let us find out who we have left out. Who are the most vulnerable people we have left out after this decision? Let us get to work very quickly to compensate those people and tell them that they will be protected this winter. It is already September and we have to do something quickly before it gets worse.

I was a member of the Labour Party for 49 years and, I must say, when I was there, I never, ever thought that a Labour Government, within a month of their arrival, would take things away from the poor and leave them cold for the whole winter. Whatever fiscal challenges there are, this is not the way to get your fiscal problems solved—by leaving lots of old people shivering in the cold and perhaps dying. That is not good. Think again, please.

[Lord Balfe (Con)]

My Lords, I do not believe that this was in the 1997 manifesto of the Labour Party. It was introduced by Gordon Brown, I believe, because he had a vision that everybody should have a financial relationship with the state. I had a short time as the liaison person with Gordon Brown. I was appointed by the European Parliamentary Labour Party and our great leader then, Alan Donnelly, said, “I’m sending you to Gordon—he’s about the most difficult one, but you’ve got a thick skin”. I recall meetings where this was discussed; it was never discussed in the area of poverty, but always in the area of benefits and helping everybody. So this was introduced by Labour and is now being scrapped by Labour, which seems embarrassed by the size of its majority and is trying to make itself unpopular—and I would like to say that it is succeeding.

There have been economic problems all my life: in 1964, 1970, 1974, 1979, 1997 and 2010. Incoming Governments claim they have found big black holes—it has always been the same; but you cannot have it both ways. You cannot say, as Liz Kendall said in the House of Commons yesterday, that the Tories were spending like “no tomorrow” and at the same time say that there is a huge deficit in public services, that teachers need more, that schools and hospitals need rebuilding and that the National Health Service is in crisis. It just does not add up. You cannot have an economic crisis and a big black hole, and at the same time huge demands for more money.

Obviously, I read the three Motions and listened to the very good statement of the noble Baroness, Lady Altmann, but I am afraid that, on balance, because of the conventions of the House, I will be supporting the position my party is taking on that Motion. I have listened attentively to the noble Baroness, Lady Stedman-Scott, who made a very good contribution, but there is one point with which I disagree: point two, the decision to prioritise above-inflation pay rises for unionised public sector professionals.

The pay award bodies came in with awards, which the Government accepted. Is it now the position of His Majesty’s Opposition that the pay awards given by the boards that we set up would have been rejected by us? It does not add up. Quite frankly, public sector workers and trade unionists have had just about as much as they can take. All the time, everything is blamed on them, but these are the people who man the hospitals, schools and all the parts of the state we rely on, and they deserve decent pay and conditions. Although I am on the Benches that do not normally say that, I have been saying it for years and I will say it now.

I also remind the House that the British Medical Association may be a union, but it is not affiliated to the TUC and nor is the Royal College of Nursing. There is a widespread demand in society for fairness, and these pay awards were part of it. The Government did not prioritise the pay awards over the pensioners; those were two quite separate decisions. The pay awards were in line with the procedures set up and continued by our Government. The decision on pensioners was a grubby little decision, taken God knows why, which does not save much.

It is quite right that we should have made it a taxable benefit from the beginning. I was only ever asked once by a Chancellor of the Exchequer—he is now my noble friend Lord Hammond—what I would put in the Budget if I were Chancellor. I said that I would tax the winter fuel allowance and abolish the £10 Christmas bonus and the 25 pence for 80 year-olds, which I have had paid to me recently and does not even buy a packet of sweets these days. I would have consolidated this money into a better pension for all the other people. There was no basic reason why people like most Members of this House should get an untaxed winter fuel allowance. That would have been my solution, and I wish the Government had chosen it.

Having made this speech, I will support the Motion that our party has put down. If it comes to it, I will also support the Motion of the noble Lord, Lord Palmer. I regret that I cannot support the Motion of the noble Baroness, Lady Altmann, for the reasons I have outlined. That is not because I do not support what she says, but as an Opposition, we need to have respect for the traditions of the House and the way we conduct our business.

[Baroness O'Loan (CB)]

My Lords, I grew up in Barnsley in Yorkshire, which is a Labour stronghold, and I find it inconceivable, even as I look at this instrument, that the Labour Government are taking away the winter fuel payment from 880,000-plus very poor people, who will go very cold and hungry this winter as a consequence.

I thank the noble Baroness, Lady Stedman-Scott, for her clear explanation of the access available to the shadow Chancellor prior to the election. What she told us was important; I did not know it.

There are disabled pensioners who may not be in receipt of pension credit but who, as a consequence of this, will have grave difficulty keeping their houses as warm as they need to keep them. They cannot go and sit in the malls, shops and cafes, as so many other pensioners do, to keep warm. We should bear them in mind, and we should not be doing this.

Noble Lords have already indicated ways in which a similar saving could be achieved, through taxation processes or windfall taxes, et cetera. Noble Lords should reflect on whether they could keep themselves warm on £218 a week, and eat. The Labour Government should think again about what they are doing.

Finally, the conventions of this House are simply that: conventions. There are particular and extreme circumstances in which we should disregard our conventions for the benefit of those who have no voice. Pensioners will lose a benefit they so desperately need, and this is the one thing people have repeatedly stopped me on the street about since the Labour Government made this announcement. This is an occasion on which we should ignore convention and vote with these Motions.

[Baroness Janke (LD)]

My Lords, as other noble Lords have said, there is a sense of bewilderment for so many people at one of the new Labour Government’s first actions being to punish the poorest pensioners for the shortcomings of the previous Conservative Government by restricting winter fuel payments to those receiving pension credit.

Means-tested pension credit is renowned for its low take-up: 39% of those entitled to it do not claim it. At this point, I would like to welcome the Minister. I am sure she will recall that during her time in opposition, we worked on a cross-party basis to try to boost the take-up of pension credit, along with the noble Baroness, Lady Stedman-Scott, and the noble Lord, Lord Foulkes. However, despite a fairly vigorous campaign, its success was marginal and small. As the noble Lord, Lord Davies, has said, successive Governments have wrestled with this problem over the years and failed to crack it.

The reasons that emerged for the low take-up were the resistance of this generation of pensioners to what are perceived as state handouts; and that the level of bureaucracy, as has already been mentioned, but also the burden of proof of need are so demanding that many people are intimidated by the idea of claiming. Many older pensioners do not have access to the ICT equipment and skills which are essential to make a claim. I would be interested to know what action the Government will take, where so many people have failed, to increase take-up. Also, as the noble Baroness, Lady Stedman-Scott, has said, if they are successful, what will be the impact on the savings of £1.4 billion?

Age Concern tells us that more than 2 million pensioners will be harmed by this measure: some 1 million who are eligible for but not receiving pension credit; 1 million who are just below the pension threshold and on low incomes, about whom the noble Baroness, Lady Altmann, spoke so movingly; and 200,000 who have high energy costs due to disability or a health condition, or who have to live in poorly insulated homes. It is also true, as we have heard in this Chamber from many noble Lords, that many pensioners who receive winter fuel payments do not need them; but surely a blanket withdrawal with no time for those affected to plan and assess their financial circumstances is callous and arrogant.

It is also irresponsible to introduce such sweeping measures without a proper impact assessment, given the risk to vulnerable and elderly people. I was interested to hear from the Minister today that we need several months to conduct impact assessments and consultations on ticket touting, yet somehow this was inappropriate for a measure such as this.

18:00

Other ways of targeting have been suggested, such as limited payments to households in council tax bands A to D or, as others have said, bringing payments within the definition of taxable income. These may raise less but are fairer and less draconian, and they remove the misery and indignity of means testing.

Ministers have assured us that the triple lock increases will compensate for lost payments but, as the noble Lord, Lord Davies of Brixton, so eloquently said, this is clearly not the case. The triple lock is here to ensure that pensions keep their value in the face of rising costs. Despite the improved value of the state pension in recent years, it is one of the lowest in Europe and the triple lock needs to be maintained to bring it to a realistic level to support the many poor pensioners without generous private pensions who depend on the state pension to survive.

This is a shabby and unworthy policy which will hit the poorest and most vulnerable elderly. Such measures show disrespect for those most in need and will have plunged many pensioner households into insecurity and fear of the future. We need a considered approach to policy-making that affects our most vulnerable citizens. Knee-jerk reactions are completely inappropriate in this context.

The Liberal Democrats are willing as a constructive Opposition to work with the new Government on the many problems they undoubtedly face. We will therefore not support the fatal Motion today but have outlined different approaches in our Motions. But we will expect the new Government to listen to the voices of others and show that they have done so. The arrogance of a large majority is not helpful to constructive working. The noble Baroness must assure us today that the Government will listen to the strong views expressed here and by pensioners and the public, objecting to this damaging attack on vulnerable pensioners, and we call on them to think again. I will be supporting the Liberal Democrat Motion.

[The Lord Bishop of Southwark]

My Lords, I, too, congratulate the Minister on her appointment and I declare an interest as a beneficiary myself hitherto of the winter fuel payment—but only in very recent years. Indeed, I wonder whether your Lordships’ House should not pass a resolution declaring a corporate interest. Members of this House are unlikely to be seriously affected by the measure. That is not the point. For many pensioners in my diocese and for considerably larger numbers, possibly extending to millions, across the country, this will be a significant financial hit, with adverse repercussions this coming winter.

As has been alluded to, the origin of the Chancellor’s decision to cut winter fuel payments lies in her view of the state of public finances. It is not a manifesto commitment. The Minister, for whom I have enormous respect, has appealed to the House to neither annul the regulations nor express regret, but I suspect that there are those on the Government Benches who are internalising their regret at this very moment. I fear, and I think this feeling is shared across the House, that the Government’s decision on this matter will define them in the public mind for years to come. It is a signal gesture on their part and one that I believe should be resisted, notwithstanding the Minister’s careful appeal.

First, all Governments should take scrupulous care with our public finances, and it is true that the national debt is now at a level not seen since the early 1960s. But a third of our national debt is owned by the Government themselves through the exercise known as quantitative easing. Secondly, deficit financing, investment, growth and reductions in debt went hand in hand in the decades following the Second World War. Thirdly, the principle of universality in public benefits, as here, is one that is being steadily eroded.

The advantage of a universal benefit is simplicity in administration, the certainty of application and the absence of a social stigma. Means-tested benefits attract doubtless unintended stigmatisation, with a burden to both applicant and state in terms of administration and, inevitably, a failure by those eligible to take up the benefit. Despite the sharp increase in those applying for pension credit, it remains the case that a significant number of people eligible for the credit have not applied for it and would not wish to seek special treatment, as they see it, by so doing.

The Beveridge report in 1942, at a time of desperate stress, identified five giants that needed to be slain on the road to reconstruction: want, disease, ignorance, squalor and idleness. The prescription for their demise was universal, as had been all the great reforms of the previous century, from public parks to museums and galleries, free lending libraries, open-air concerts, healthcare, pensions and unemployment benefit. Those principles were extended after 1945.

The prescriptions in more recent years have been of restricted access, increased commodification and means testing. Of these, means testing is always the costliest option. They have accompanied low growth, increased inequality and an atrophy of positive outcomes. After a wide consultation, the proposal suggested by other Members to make the payment a taxable benefit clearly has much to commend it.

I shall listen to your Lordships with care, but I am minded to vote for the Motion in the name of the noble Lord, Lord Palmer of Childs Hill, if not for that of the noble Baroness, Lady Altman.

[Baroness Butler-Sloss (CB)]

My Lords, I entirely understand why the Government want to get rid of a fuel payment to many people who can afford to deal with even the heightened cost of fuel for heating, but I make no apology for repeating what others have said, because it seems to me that it has to come from right across the House in order for—just possibly—the Minister and therefore the Government to listen to what we are saying. I do not think, from what I heard happened in the Commons yesterday—although I was not in this country—that there is more than a faint hope of that, but it is so important that we should be saying this from across the House.

We know that those eligible for universal credit do not always take it; we have been told that. But we also know of a large number of people who have an income just above universal credit and that is the group about whom I am most concerned when it comes to an increase in heating costs. The triple-lock pension increase does not come until April, but the heating cost is coming now. These people are going to suffer this year and I find it inconceivable that a Labour Government who have done so much for this country in so many ways should put themselves behind depriving ordinary, elderly people—and I speak as a very elderly person—of the opportunity to not have to choose between eating or heating. This seems to me the saddest thing I could possibly think of.

It may be a short-term problem in the sense that the triple-lock payment may help for next year, but, having heard what other speakers have said today in your Lordships’ House, that seems to me unlikely and it does seem that we will need a fuel payment for those on universal credit and those not on universal credit but earning very little more. I absolutely beg the Government to think again.

[Baroness Stowell of Beeston (Con)]

My Lords, I commend my erstwhile noble friend the noble Baroness, Lady Altmann, on her powerful opening of this debate. I agree with the arguments she put forward, as well as those of my noble friend on the Front Bench. There is very little for me to add to what they have already said about this decision that the Government have made and for which they have no mandate. They have not even had the respect to set out a proposal in a Budget in a much more rounded way, as put forward by my noble friend Lady Altmann.

I want to make a bigger point. What a lot of people find quite hard to take at the moment is that, alongside this decision, the Prime Minister has the gall to say that his Government are acting in a way which will restore public trust. He seems not to understand that all of us in the political class over the last few years have lost public trust—himself included—because of our disregard and disrespect for what the electorate have been demanding from us. For this Government now to take decisions that affect people so directly without any notice—believing that such decisions can be justified because the Prime Minister and his Chancellor are convinced that they know best—damages public trust further.

Of course, the impact of this politically on the Labour Party is a matter for it, but I urge the Minister and the rest of her Government to accept the arguments put forward by my noble friend Lady Altmann today. I hope that she does not mind me calling her my noble friend; she will always be “my noble friend” to me.

[Baroness Altmann (Non-Afl)]

Absolutely. She will always be my noble friend.

[Baroness Stowell of Beeston (Con)]

I also urge the Prime Minister to drop his misplaced belief that he and his Government are somehow morally superior and are acting in a way which will restore public trust. On the basis of this decision, they are not.

[Lord McCrea of Magherafelt and Cookstown (DUP)]

My Lords, the decision by the Government to remove the winter fuel payment for millions of pensioners is both cruel and reckless. It will mean that many elderly people will have to decide, as others have noted, between heating and eating this winter.

This is an attack on many who worked hard and contributed much to the prosperity of our country over their lifetimes. Many pensioners in Northern Ireland have no alternative to oil-fired burners for heating their homes and, with this Government’s proposal, 250,000 will lose this payment. Citizens Advice, Age UK and other charities across the United Kingdom have warned of the implications of this proposal—that low-income households that are already struggling will face intolerable choices—but their voices and warnings are falling on deaf ears. Surely Ministers must acknowledge that those now forced to live in cold home conditions are at increased risk of serious illness. Vulnerable pensioners and those with disabilities can add to the burden placed on our National Health Service this winter. In fact, it is believed that, through this proposal, many will die.

It is also noted that the Government chose to invoke the emergency provisions that permit them to bypass the scrutiny of the Social Security Advisory Committee. I thought that this Government proclaimed that, coming to power, they would be transparent and open and would restore integrity to our system of government, but at the very first hurdle they have failed miserably. I hope that the Minister will honour this House by giving us an answer to a simple question: when will they publish the impact assessment for these regulations? That question was asked three times in Prime Minister’s Questions today in the other House, and the Prime Minister gave no answer at all.

This decision was taken by the Labour Government also without consultation with the devolved regions. The action taken by the Government is callous and was not in the Labour Party’s general election manifesto. This is an attack on vulnerable pensioners, and a deliberate one. I know that the Prime Minister and the Chancellor of the Exchequer stated, “We had to do this”, but that is not true. They did not have to do this; they chose to do it.

18:15

Upgrading the system is one thing but denying payment to pensioners, often with serious health conditions and disabilities, is repugnant. The Government are picking the pockets of those who have made our country great and endured much hardship along the way. I fear that this could be only the start of what this Government will continue to do to not only pensioners but ordinary workers and taxpayers. Sadly, I have no belief that the Government are listening to the appeal made by many in the other House and right across this House. It is also questionable what in-year savings will be accrued when this cruel action is carried out.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, there have been some very fine speeches, but I will not repeat them. I really hope that the Government Benches are listening because there is agreement across the House.

I will add a couple of points. Something I found very galling over the last few days is Members of the Government telling us that they are not frightened to be unpopular. I admire people who are not frightened to be unpopular, but sometimes you are unpopular because you are unpopular and not because you are brave. There is something to be said about the self-congratulations of people saying, “This proves that we’re proper leaders and that we’ve got courage”. Actually, it does not prove that. It sometimes can prove that you are tin-eared, not listening, and more interested in yourself and your internal party discipline than in the state of the country. Bravery might have been to have gone out on the doorsteps during the election to tell people that you were going to abolish the winter fuel subsidy. I might have had some admiration if that had been a campaigning tool from the manifesto, but it was not.

I am very worried about something else that is an implicit part of this discussion: this debate is in danger of becoming quite polarising and divisive in a very different way. I saw that in relation to what is known as boomer bashing. I do not know whether people have heard the insult “Okay, boomer”, but it is quite fashionable. There was a social media tweet—I do not know what it is called any more, maybe a posting—that went viral a few days ago. It was posted by a clinical consultant with quite some considerable followers, who wrote:

“I’ve elderly parents & most of my patients are elderly. However, I find it tough to sympathize with a demographic that’s been fortunate to see kids & grandkids grow up; voted for Brexit; got free education; triple lock pensions; and kept the Tories in power”.


I quote that because it completely split the audience. Thousands and thousands of people commented. Either people said that this is absolutely right—“These are the greedy boomers who’ve destroyed this country, the pro-Tories” and all the rest of it—or people said that it is a really unpleasant and nasty point of view.

I worry, and I warn the Government, that there is a danger of stirring up this notion of a gerontocracy. I have been doing quite a lot of media, and if noble Lords listen to phone-ins they will hear what I have heard frequently: that these are old, greedy people who have ruined the planet, ruined the country, ruined everything, and they deserve what they get. I do not in any way imagine the Government think that this is what they are doing, but it is a defence that people use to justify this policy.

I say that particularly because we have had a number of lectures from the Government about other people being the kind to use toxic language and stir up divisiveness—it is always the other people and not the nice people. In this instance, the “nice” party is in danger of having stirred up quite a lot of antagonism and hatred towards a generation who deserve better—ordinary working people who just happen to be old and proud enough to not want to claim benefits. They really deserve better, as do we all.

[The Lord Bishop of Sheffield]

My Lords, I speak in broad support of the regret Motion in the name of the noble Lord, Lord Palmer. I appreciate the very tight fiscal constraints under which the Government are having to operate, and the need for tough choices to be made. I also accept the recent Statement by the Prime Minister that tough choices are almost by definition unpopular choices. Tough choices must also be wise choices, however, and I confess that I harbour misgivings about the wisdom of this proposal for two reasons.

First, as others have observed, I worry about the speed at which these regulations have been laid, given the likely impact on some of the most vulnerable people in our communities. There has been no careful assessment of this impact, which is bound to be exacerbated by the fact that the energy price cap has just been lifted, meaning that this winter many pensioners will face increased fuel tariffs precisely when they are bound to incur increased fuel consumption, and just when a relief that they previously enjoyed has been withdrawn.

Secondly, I wonder whether the threshold for continued receipt of winter fuel payments is the right one. I understand that pinning continued payments to pension credits will make it straightforward to administer and, given the speed with which the Government feel that they need to act, I appreciate the appeal of this simple solution. However, I doubt that in this situation a simple solution is the best solution. All Members of this House recognise that many either do not claim pension credits to which they are entitled or are marginally ineligible for those credits and will inevitably experience considerable additional hardship on account of these regulations.

I am grateful to the Minister for the encouragement she has been giving this week to all those who are entitled to pension credits to apply for them, and I assure her that I shall do everything I can to communicate that message across South Yorkshire and the East Riding. However, I ask her, in a constructive spirit, whether the Government are confident that they have calibrated with sufficient care the eligibility bar for continued receipt of winter fuel payments. Will the Government not consider again the possibility that the bar has been set too low?

[Baroness Verma (Con)]

My Lords, I have listened to the noble Baroness, Lady Altmann, and my noble friend Lady Stedman-Scott on the Front Bench, and I have sat here thinking, “How did we come to this?”—a first-world country that could treat our pensioners so badly. How could we sit here and have a debate about taking away really needed money from the elderly and most vulnerable people in our communities? Today is quite a cold day; it suddenly went cold, and I am feeling it, and I am pretty certain that most pensioners in their households will be thinking, “Should I switch the heating on or leave it off?”

I speak on behalf of the 10,207 pensioners in the city of Leicester who are now not going to receive this payment. I feel sad, but also ashamed that we are standing here debating a very small saving in the bigger scheme of things. I do not understand it—I do not get it—because I felt that we were a country that looked after the most vulnerable. I felt that we were this gold standard that people looked at, and that we were able to say that we protect those who cannot protect themselves. Yet here we are, quite happy to debate £1.4 billion. I am not going to challenge the public sector workers’ pay award; I just want to focus long and hard on why we are sitting here thinking that we have no hope in changing the Government’s mind. If the Government really want to help, they need to take this ridiculous notion back and rethink. If the Government want to save £1.4 billion there are plenty of other ways of doing it, and I urge the Government to use them.

[Lord Empey (UUP)]

I, and I think many colleagues in the House, were surprised when this measure was selected to save money. We understand why Governments have to save money from time to time; we seem to have forgotten that we spent our way out of the Covid crisis, which has contributed very substantially to the debts this nation has and which the next generation will be paying back—and maybe their children as well. The Labour Party has just won a very convincing election victory, and while I understand what the noble Baroness, Lady Altmann, and indeed what the noble Baroness, Lady O’Loan, said with regard to challenging this measure, I personally do not think it is appropriate for us to challenge a newly elected Government at this stage, even though this measure was not in their manifesto and must have been clearly in their mind before the election—they did not just invent it on 4 July.

However, this idea is bonkers. It is not going to save £1.4 billion and, as the noble Lord, Lord McCrea, said, it will probably increase the number of people who will have to engage in health service requirements. If we manage to increase the take-up of pension credits, that is well and good, but that will also take away from the £1.4 billion saving. The Secondary Legislation Scrutiny Committee, a very highly respected committee in this House, has rarely produced a more depressing commentary than that on how the Government have dealt with this.

I would also like to localise the impact of this measure. The noble Lord, Lord McCrea, made a point about how my own region in Northern Ireland will be affected. We have 306,000 households that get the allowance, but that number will be reduced to 57,000, plus whatever additional pension credit is claimed. The noble Lord, Lord Davies of Brixton, made a forensic assessment of these proposals, but we all know that that is going to be at the margins; no matter how we push these things, there are a whole variety of reasons why we cannot achieve them. Nevertheless, of all the issues that we could look at to save money, this is the last area at which we should look. I just do not understand it. This is a poll tax moment for the Labour Party—it is on that scale, and it will last. It will not go away.

I can only suggest to the Government what I think has happened: they have got themselves on to the hook, and for tough-guy leadership reasons the Prime Minister does not want to be seen to be backing off —blah, blah, blah. The Government forced their MPs into the Lobby or sent them off with a slip for the day. They said, “Get out of the way, do not vote against us”, et cetera. I understand all that.

However, I think that we all would respect and acknowledge a Government that said, “Okay, perhaps we haven’t gone about this the right way. We will find other savings, but we will start a consultation process as we normally would, through the system, and see what we can come up with”. We all know that many of us in this House get the benefit, and we do not need it. So, tax it, or do whatever you like—the noble Lord, Lord Palmer, is an accountant and he knows these things—but, whatever can be done, let us do it. “Please”, we must say again to the Government, “this is bonkers”.

18:30

[Lord Morrow (DUP)]

My Lords, I have a few brief comments in relation to what is before the House. As far as my party is concerned, we will not have any trouble supporting either the noble Baroness, Lady Altmann, the noble Baroness, Lady Stedman-Scott, or the noble Lord, Lord Palmer, because we are infuriated by this matter.

The decision to discontinue paying the £300 winter fuel payment to pensioners is a shock and a surprise, as it comes after just 68 days in office by the Labour Administration, who often declare their support and concern for the most vulnerable in our society. I suspect that this is an opportunity at the start of their tenure to get the bad news out of the way quickly so that, when they come back for another mandate, most people will have forgotten who “done them in” and when it happened. However, I suspect that people will not forget. I implore the Government to think carefully, even at this late stage.

We have all heard much about the £22 billion black hole in our finances. If this is the case, one is left wondering why the most vulnerable should be targeted in an attempt to balance the books. Surely there are other ways, as the noble Lord, Lord Empey, has just mentioned. Why pick on the most vulnerable, on those who cannot answer back? It is very difficult to take this.

Pensioners who already find it very difficult will find it even more difficult to survive following this measure by a Labour socialist Government. I was speaking to some folk today who said to me, “I voted for the Government, a new Labour Administration, for change, but I didn’t realise that this was the change they had in mind”. They are now learning that they may have made a mistake and misplaced their vote on this occasion. They were quite moderate in their condemnation of the Government, but they said, “I did not expect to get this slap in the face, and I certainly did not expect it within two months or so of Labour taking over”.

The Government say, “We didn’t know that we were going to be confronted with a £22 billion black hole”. I suspect that we will hear some of that when the Minister responds. I used to sit in a degree of awe when the Minister was on the other side of the House, and every time she finished, I used to say, “Well, there is one Peer at least with a social conscience”. I am not saying that she has now lost her social conscience, but she has a wonderful opportunity now to demonstrate it. I look forward to hearing what she has to say.

Now that this Administration are in office, it seems that the rich will get richer and the poor will get poorer. In my part of the world, they will say, “Well, when was it ever any different?” I said to them that Labour is now in and has promised that there will be change. The footnote to everything that they said was that they wanted change. Well, this is a change in the wrong direction. I am sure that the Minister will give us the reason why they had to change and hit, below the belt, the weakest and the poorest in society. I look forward to hearing it.

Was there a single word in the manifesto that this is how it would be? Labour has been returned with a very convincing majority—overwhelming, some of us would say. However, I suspect that, had they hinted that they were going to target pensioners, that majority would not have been so overwhelming; it would have been much less, if it existed at all.

I suspect that many Labour Peers here today are uncomfortable with this and they will find it difficult to walk through the Lobbies here this evening and say, “This is exactly what I came into this House to do: to punish, punish, punish the weakest in society”. I implore Labour now to step back and think again. How many more punitive measures will this Government foist upon us and particularly on the vulnerable? Balancing the books is important, but balancing the books on the weakest in society is not the way to go. I say to the Government, “Please rethink your goal”.

When Labour was in opposition, it boldly declared—and these are the figures not from the bad Tories, my colleagues or the Lib Dems—that to scrap the £300 fuel payment would cost as many as 4,000 lives, as OAPs would be unable adequately to heat their homes. Are they still saying that? Is that still their position? If not, why has it changed so quickly? Just when they get their hands on the levers of power, they decide, “We’ve a very convincing majority: we can think, do and say what we like and show everybody who’s in control”. Yes, they can, but please can they reconsider what they are doing here? They have not endeared themselves to very many.

That £1.5 billion is a small amount in the scheme of things. My noble friend Lord McCrea has already alluded to the fact that there will be no savings at the end of the day. What about those who get cold, are taken to hospital and must be cared for? Where will the savings come from? I am sure that the Minister will outline in some detail where she sees them coming from.

[Lord Hannan of Kingsclere (Con)]

My Lords, I will not detain the House for long, but I want to just say one thing. I may be the only person who speaks up for the Government Front Bench, for which I do not expect them to thank me.

It is appalling to suggest that Members of this House are somehow personally lacking in social conscience when it is other people’s money, rather than their own, that we are talking about. Again and again, we see this conflation between the public need for economy and people’s personal morality, as though it was their own meanness or generosity. We had the noble Lord, Lord Palmer, talking about them as Scrooge. Scrooge was dealing with his own assets, not somebody else’s. The noble Lord, Lord Morrow, who knows how much I admire him, just said that the Minister has a chance to re-establish her social conscience. It is not her social conscience.

We can disagree with this policy. I would have done many things differently from this Government, as they know. One thing, which will make me even more unpopular, is that I would not be putting up the cost of energy as we do in this self-congratulatory way in vote after vote and then complain about the consequences, as we have been doing today. But can we please conduct our debates on the basis that, if you happen to favour the idea of benefits as a last resort for the needy rather than a universal entitlement, that does not make you a bad person? People on both sides of this issue are motivated by humanity and decency and, ultimately, by a concern for the welfare of the nation as a whole.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Sherlock) (Lab)]

My Lords, that seems a good place to start. I start by thanking all noble Lords who have contributed to tonight’s debate. We have covered a lot of ground and there have been many thoughtful and constructive contributions. I thank the noble Baroness, Lady Stedman-Scott, for her welcome and I welcome her, in turn, to her place on the Opposition Benches. We have worked well together over the years, although I must admit I prefer it this way round—if not tonight.

Before I turn to the specific issues and questions that have been raised, I want to start by clearly setting out why the Government feel the need to take action and what we are doing. Then I will do my best to answer all the questions that have been asked tonight. I might not manage to attach everybody’s name to them, but I want to try to hit all the questions, so please bear with me if that is what happens.

The reason for the change is simple: there is a huge hole in the public finances. The noble Baroness, Lady Stedman-Scott, started by addressing the projected £22 billion overspend for this year which the Chancellor found when she came into office. The noble Baroness seems to think that the OBR knew all about this. The OBR has clearly specified that it was not told about the overspend. It described it as

“one of the largest year-ahead overspends against … forecasts outside of the pandemic years”.

Beyond this figure that we are bouncing back and forth, what does it mean in practice? It means that the day-to-day departmental spending by the previous Government as set out in the Spring Budget was, frankly, not even close to reality. Some noble Lords might remember that my first appearance at this Dispatch Box was to answer questions from around the House calling to keep the household support fund, which helps local authorities to help people with the cost of living, until the end of the year. The fund was due to run out in September, and I was called upon not to let that happen in the middle of the financial year. I went back to the department, but there was money in the budget to fund it only until September; there was nothing for the second half of the financial year. We found the money to cover that, but doing so, plus the Barnett consequentials, came in at an estimated £500 million—which had to be found from nowhere.

Ask my colleagues on the Front Bench what they found—a £6.4 billion overspend on the asylum system; a £2.9 billion overspend on the transport budget; and new roads, hospitals and train stations promised but not funded. There has not been a spending review since 2021. As a result, the public sector pay rises were not budgeted for and our reserves were spent three times over. This needs to stop. I take very seriously the comments made by the noble Baronesses, Lady Stowell and Lady Fox, about the importance of public trust, but the manifesto on which we were elected began with a promise that we would regain economic stability and by that means deliver growth. To do that means that we have to take difficult financial decisions right now to stabilise our economy before we can start the rebuilding, and then we can start to give the people we are all here to serve the better future they deserve.

No one thinks that things are okay in our country—do they, really? Public services are struggling, the prisons are full to bursting, the courts are overrun, and NHS waiting lists are sky high. We must deliver the change the country needs, but none of that is possible if we simply ignore the overspends right in front of our faces and put economic stability and credibility at risk.

That is why, as well as our plans—the noble Lord, Lord Desai, may be glad to hear this; I cannot remember what economic rationalism is, but it probably does not include this—to scrap non-dom tax status, close the loophole enjoyed by private equity investors and introduce a proper windfall tax on energy company profits, we are having to make some difficult in-year spending decisions. This has included cancelling capital projects, stopping discretionary spend and, yes, means-testing the winter fuel payment so that it will no longer go to all pensioners—many of whom are clear that they do not need it—but to those who need it most.

I say to the noble Baroness, Lady Fox, that I am absolutely with her. I do not want to see this as being about pensioners versus young people or public sector workers versus pensioners. The fact is that pensioners are not a homogenous group—we can tell that by looking around the House. There are rich pensioners and poor pensioners, and our job is to try to have a system that does its best to be fair across the piece.

I think most noble Lords would agree that the winter fuel payment should not be going to the richest, so we are therefore going to target those who need it most. Let me be clear for the record: those on pension credit, and those over state pension age living in a household that gets universal credit, income-based JSA or ESA, income support or tax credits will still receive £200 or £300 a year. That is on top of the significant rises in the state pension, which I will come back to in a moment.

I am not saying that this was an easy decision, and nor were many of the other decisions the Chancellor has had to take; but she believes that it was a necessary decision, and so do we. These are difficult circumstances, and we should be targeting.

I have heard very few noble Lords, if any, call for no reform of the system, with the possible exception of the right reverend Prelate the Bishop of Southwark. I would love to have a conversation with him on another day about how we balance means-testing versus universal benefits, because there is an interesting conversation to be had. But when public money is tight as it is right now, it is completely legitimate to decide to prioritise those who need it most.

I would like to see an end to the stigma around benefits. The benefits system is like social security insurance for all of us—it is there because needing it could happen to any of us. That is why putting money into it should not be stigmatising, and we should all encourage people not to see it that way.

18:45

A number of noble Lords, including the right reverend Prelate the Bishop of Sheffield—I will stop naming noble Lords; it is invidious and I will get them wrong—have said “Don’t do it now” or “Don’t do it this quickly”. The speed issue was also raised in the Secondary Legislation Scrutiny Committee. Delaying the policy for another year or until later is, unfortunately, simply not an option. We are trying to save money to plug the hole in this financial year, and we are already half way through it.

Urgency is also the answer to the question raised by the SLSC and a number of noble Lords about the timing of laying the regulations and the role of the Social Security Advisory Committee. Let me set this down for the record, as the SLSC has taken the time to make these comments for the benefit of the House. Because the savings needed to be made in the current financial year, the regulations had to be laid quickly enough to observe the 21-day rule but still come into force by the qualifying week, beginning 16 September. That meant there was no time to consult SSAC in the usual way, so the Secretary of State invoked the established urgency procedure. As a result, the committee formally considered the regulations this morning when it met, and Ministers will consider any recommendations it has made.

The SLSC also suggested that we delay the qualifying week for winter fuel allowance. Unfortunately, that would delay payments to all those people who are depending on the winter fuel payment and expecting to get it, so that would not help either.

I was asked why we did not publish a formal regulatory impact assessment. Noble Lords will know that it is not required for legislation such as this, but of course Ministers did their statutory duty and looked at the equality effects of this change. We all know what the effects are; we have published information and noble Lords have debated this at some length, as has the other place.

The noble Baroness, Lady Stedman-Scott, and others, referred to this decision in the context of public sector pay awards. That was another cost not accounted for by the previous Government, a point helpfully made by the noble Lord, Lord Balfe. The previous Government commissioned the independent pay review bodies without any affordability criteria, and then sat on the results. This Government accepted the recommendations of those bodies because it was the right decision for those who work in public services and for those who use them, many of whom are pensioners.

Improving our public services is part of the change that, during the election, our manifesto was crystal clear about the need to deliver on. But we cannot do that while healthcare workers are using food banks and teachers are leaving the profession in droves. We have to get public services right.

Some noble Lords have noted the wider context of the winter energy price cap and the cost of living going up. Let me turn to what the Government are doing in this respect. First, I want to be clear about what is happening with pension credit. Some 1.4 million of the poorest pensioner households are already receiving pension credit. It is worth up to £3,900 a year, and they will still get the winter fuel payment on top. There are, however, many others out there who do not claim it, as noble Lords have said. We urge them to claim this support. They can do it in various ways—please spread the word. People can claim it online. Some three quarters of that 1.4 million do so, and the great advantage is that, rather than filling in a huge form, they might have to answer only 35 questions, because online you skip the questions that do not apply to you.

Those who do not like doing things online, as the noble Baroness explained, can often reach out and get a friend or relative to help them, or go to local organisations; or they can simply call DWP free of charge on the telephone and we will take them through the process step by step. We will fill out the form for them, so effectively, it is like doing it online, but somebody does it for you at the end of a phone. For the most vulnerable, DWP visiting officers can even help them fill in an application form in person.

I want to send the word out: even if someone thinks that they are just over the threshold for the safety net bit of pension credit, they should still check, because they might still qualify for the savings credit element of pension credit. If they do that and they get anything at all, they will still get a winter fuel payment. So please tell anyone you know who might be able to qualify to get in there and find out.

So what are we doing to find them? It is a really good question from the noble Lord, Lord Palmer. We are doing a lot. We kicked off last week with a week of action to drive up claims. We are working closely with charities and local authorities to encourage pensioners to check their eligibility and apply. We have written to every single local authority asking them to identify pensioners who might be eligible. The Deputy Prime Minister is working with housing associations and supported accommodation providers to ensure residents know the benefits they are entitled to. It is part of a cross-government effort in which we will, for example, ensure front-line NHS staff have the information they need to signpost patients who might need help with energy costs to where they can get support.

For the first time, we are writing directly to all pensioners on housing benefit who we think could be entitled. The noble Baroness, Lady Stedman-Scott, thinks she did it; her Government tried it out with 10 local authorities, and it worked. We are going to do it for everybody now and make sure they find out what is going on out there. We will merge the administration of housing benefit and pension credit as soon as operationally possible—something repeatedly delayed, she will acknowledge, by the last Government. It will mean that pensioners who get housing benefit will also get the pension credit they are entitled to. There is going to be a big media campaign, in print and broadcast, which, as well as trying to reach pensioners, will urge people to reach out to retired family, friends and neighbours to get them to check if they are eligible. That work will carry on right up to the deadline of December 21 for people to claim the winter fuel allowance.

But I need to make something very clear. The noble Baroness, Lady Altmann—like many people I have been reading her in many of my newspapers recently, even the ones I do not normally read—had a full-page article in the Daily Mail yesterday in which she expressed her views much as she has tonight. She said in that article that it was too late for people to apply now for pension credit. That is simply untrue. The qualifying week for winter fuel payment is the week of 16 September, but pension credit can be backdated for three months, so someone can claim until 21 December; it will be backdated and, as long as they get in, they will also get their winter fuel allowance as well as any backdated payment to which they might have been entitled. Remember, pension credit could be worth £3,900 a year.

Over the past five weeks, we have already seen claims for pension credit more than double, and we expect it to keep rising. The noble Lord, Lord Palmer, again raised the important question about delays in processing, which is something the SLSC also raised. I can confirm a delay in processing will not affect someone’s entitlement—so just get the claim in, as it will not affect their entitlement. We are redeploying 450 staff to ensure we process pension credit claims as quickly as possible. So let us join together to get the word out.

I will pause for breath. I am sorry. If I speed up anymore, only dogs can hear me, so I will try to slow down.

Some noble Lords have questioned whether means testing the winter fuel payment will achieve the intended savings, given increasing claims for pension credit. I just want to make clear to the House that the estimated savings from this policy assume increased take-up of pension credit in line with the highest levels it has ever reached. We want everybody who is going to go out there who is possibly entitled to claim this to do so. Some noble Lords have speculated whether, if every single person claimed pension credit who was entitled to it and got the winter fuel payment, we would save any money. In a hypothetical world, if every single person who could get pension credit gets it and gets the winter fuel allowance, do you know what we would have done? We would have taken one of the least targeted benefits in the world and turned it into one of the best targeted benefits in the world. Let us see what happens when we get out there.

We know there are some concerns about pensioners affording energy bills this winter, and we agree no one should be unable to heat their home. This action on pension credit comes on top of other commitments to support pensioner households. Of course, energy bills are tough: the price cap has gone up. But, compared to last autumn, they are £117 pounds lower, and bills have fallen over the last two years. We also provide a warm home discount, which gives a £150 rebate on electricity bills for eligible low-income households, including 850,000 pensioners. Crucially, we found the money to extend the household support fund. The truth is that, with any threshold, there are always hard cases above it, and that is where discretionary pots of money come in. Please encourage people to go to their council for help. We will also use our warm home plan to reduce bills and slash fuel poverty by upgrading millions more homes with low-carbon heating and better insulation.

The noble and learned Baroness, Lady Butler-Sloss, mentioned disabled pensioners, who face extra costs—she is absolutely right—with heating. There are specific benefits deliberately aimed at disabled people to help with the extra costs. Depending on age, attendance allowance, personal independence payment and disability living allowance are all available and are not means tested, but, as it happens, if somebody is on pension credit, they can also give them extra money in pension credit as well.

I have heard various concerns about the threshold, so I will try to go through the different helpful suggestions that have been made. The first is that we should tax it but not means-test it. I am afraid that falls on two fronts: it does not pass either the savings test or the fairness test. I disagree with my noble friend Lord Davies, because it would actually go against the general rule that income replacement benefits are taxable but those such as winter fuel payments, which are designed for specific costs, generally are not.

Limiting the winter fuel payment to higher rate taxpayers would not begin to deliver the savings needed—and, trust me, it would be an administrative nightmare. If anyone doubts that, ask the last Government, which tried to do that to child benefit and they are still trying to figure it out now. Using council tax bands as a proxy is not an option. We do not have the data on what pensioners’ homes are worth, where they are and what their council tax value is.

Other suggestions included adding a big increase to the 25p age addition, which the noble Baroness, Lady Altmann, suggested. Part of the problem with that is that not only would that become taxable but it could make recipients fail the means test for pension credit if they take that as well. Likewise, rolling winter fuel payments into the state pension would just give it to everybody, even those who do not need it. When public money is this tight, that is not the right way forward. As regards creating a new higher stand-alone threshold, I can see that is tempting, but it is just not practical as we would have to build a whole new means test for a payment of two or three hundred pounds once a year. Pensioners would then have to make a separate claim and be separately assessed just for winter fuel payments. By linking entitlement to pension credit, not only can we ensure we support the poorest pensioners but we can make sure we pay pretty much all of those who are eligible automatically.

I have no idea what the time is, but, in trying to wind up, I shall pick up on other points that were raised. The noble Baroness, Lady Altmann, said that these payments will still go to pensioners in Europe. I just want to clarify this. The only people who will still get these outside the UK are those who are covered by the withdrawal agreement, agreed by the last Government, are living in the EEA or Switzerland, getting an equivalent benefit from that Government but also still have an appropriate social security link to the UK, and that country has to be colder than the warmest region of the UK. I can reassure her that that definitely takes out Spain.

The noble Lord, Lord Morrow, quoted some research from the Labour Party from 2017. I did check this, because I saw this in the papers. The big difference is the fact that the full rate of basic state pension has increased by more than £2,600 since 2016-17, and the full rate of the new state pension has increased by more than £3,400 in that time.

I just want to say we have to consider this change in the round. This is not the only thing the Government are doing for pensioners. We have committed to keeping the triple lock, not just for this year or next year but for the whole five years of this Parliament. That means pensioners every single year will find their benefits going up and up, because increases are based on the previous year; they go up and up. Despite the grim finances, we have done that and 12 million will see their state pension going up year on year throughout this. Last year, it went up by £970; this year, the new state pension went up by £900. If the ONS figures are confirmed, next April it will go up by another £460. This is a significant difference. I do not have time to take my noble friend Lord Davies on, but I think he is wrong in his calculations on the triple lock. I am happy to explain to him why over a decent sized gin and tonic afterwards.

Let me finish here, as time is against me, and come back to my main argument. If we can face up to the reality of our financial predicament and if we can take the difficult but necessary decisions to stabilise our economy, we can start to bring about the change our country needs. If we can unlock growth, we can rebuild our public services, we can tackle poverty, we can spread opportunity and we can deliver the dignity and security in retirement that pensioners deserve. I have tried really hard to listen to concerns, I have had open meetings with Peers and I have had conversations with many noble Lords. I have listened and tried to answer every single concern I have heard tonight—if I have missed one, please come and grab me afterwards, but I have really tried. I hope I have made it clear: this was not an easy decision, and it was not one taken lightly. Since I have tried to answer all the points given here, and those raised by the SLSC, and given that the instrument was extensively debated yesterday in the elected House and that it was overwhelmingly carried, I urge noble Lords not to support any of the Motions.

19:00

[Baroness Altmann (Non-Afl)]

My Lords, I too welcome the noble Baroness to her position on the Front Bench. She brings huge expertise and value to that position. I hope that we can work together in the future on other pension-related issues—but on this issue, I have listened carefully to all noble Lords who have spoken and I have not heard any reasonable justification at all for the hurry to take this money away from the poorest pensioners this year. I have heard a marvellous case for changing it, and about the excellent work that is being planned to try to improve the take-up of pension credit and maybe to help people get the support fund, but none of these off-sets the loss for the possibly 3 million of the poorest pensioners—I repeat, the poorest pensioners, who are not the ones who are already on pension credit or might have a chance to receive it with the current take-up increase plan. This year they are at risk in their homes. This is the last chance to protect them and help them keep warm this winter.

For me this is about policy, not politics. I do not welcome any of the undertones or overtones that have tried to look at politics in this. There is none for me. My whole pensions policy life’s work has been about the idea that pensions are about not just money but people and giving them a better life in retirement. On that basis, I have not heard how the Government can possibly protect the poorest this winter.

We have heard about the triple lock. A triple lock increase of 4% on the basic state pension next April will give pensioners—many of whom, demographically, will not survive that long, regardless of the winter fuel payments—an extra £6.80 a week. They will not recoup a £300 loss until about February 2026. They need the money for their bills this winter. As I said, if the Government were to talk about this for next year, I would not be here—and believe me, I wish I was not here.

I know how hard it is to defy a Whip. I also know, though, as the noble Baroness, Lady O’Loan, said, that the conventions of this House are just that: conventions. We are the only mechanism left to protect the poorest pensioners and help them keep warmer this winter. With a very heavy heart, I believe that I must now test the opinion of the House.

19:03

Division 1

Ayes: 30

---

Conservative: 8
Crossbench: 8
Democratic Unionist Party: 5
Non-affiliated: 4
Ulster Unionist Party: 1
Green Party: 1
Liberal Democrat: 1
Plaid Cymru: 1
Bishops: 1

Noes: 138

---

Labour: 125
Crossbench: 10
Non-affiliated: 2
Conservative: 1