Pension Credit

Lord Cameron of Chipping Norton Excerpts

Monday 9th September 2024 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I have had lots of very interesting suggestions from, and conversations with, Members from around the House, who have variously suggested trying different thresholds and creating a new, higher threshold. One of the challenges is that this is a single, once-a-year, one-off payment. There is already a means-testing process for pension credit. Creating a brand new means-testing system for a one-off payment would involve simply too much bureaucracy, complication and red tape for what is a once-a-year payment. So, we have ended up going for pension credit, which is already there. The great advantage is that, if somebody is on pension credit, we can pretty much automatically give them the winter fuel payment, so they will not have to apply for it, whereas, if we create a new special scheme, people will have to apply for it. We will continue to look at a range of alternatives, but this is clearly the only sensible way to do this in the short term. I stress again: everybody on pension credit is entitled to this money. Let us get them out and getting it.

[Lord Cameron of Chipping Norton (Con)]

My Lords, as someone who made a promise to Britain’s pensioners to keep the winter fuel payment, and kept that for six years as Prime Minister, may I make a gentle suggestion to the Government? Instead of this misguided attack on the winter fuel payment, why not simply say that pensioners who are higher-rate or additional-rate taxpayers do not receive it? You may only raise 10% of the money but you would save 90% of the shame and embarrassment of the current position.

[Baroness Sherlock (Lab)]

I am grateful to the noble Lord. He will remember that the previous Government decided to do something similar with child benefit. They wanted to means-test it, but because they could not find a way to do so, they decided to get just higher-rate taxpayers. He may also remember the massive complications that flowed from that—because the tax system is individual-based and the benefit system household-based—and that it caused huge complications and the Government effectively had to relitigate to do it all over again. We need to find something that works and is straightforward. The pension credit system is established; people know it is there. Our job is to make sure they can apply for it. If we can do that, we can ensure that they get not just this £200 or £300 but the thousands of pounds they might be entitled to under pension credit. We have absolutely committed to looking after pensioners. The triple lock gave people £970 the year before and £900 this year; who knows what the earnings data will be, but it could be several hundred pounds more this year as well. We will keep investing in pensioners, but we will direct more to those who need it most.