Social Fund Winter Fuel Payment Regulations 2024

Lord Hannan of Kingsclere Excerpts

Wednesday 11th September 2024 Lords Chamber

[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.