Energy: Winter Fuel Payment

Lord Oakeshott of Seagrove Bay Excerpts

Monday 19th December 2011 Lords Chamber

Asked By

[Lord Oakeshott of Seagrove Bay]

To ask Her Majesty’s Government whether they will make the winter fuel payment subject to basic and higher rate tax and limited to United Kingdom residents.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, the winter fuel payment is a simple to administer payment that ensures that older people can turn up their heating in the winter months without worrying about the cost. We have no plans to tax the payment. We are obliged under European law to continue paying the winter fuel payment to people who qualify for a payment in Great Britain and then move to another European Economic Area country or Switzerland.

[Lord Oakeshott of Seagrove Bay]

I thank the noble Lord for that reply. I am rather nervous about this Question because 674 noble Lords are entitled to receive the winter fuel payment. That is 81 per cent of us. Would I be right in guessing that the Minister, who is 61, is, like me, one of the half a million top-rate taxpayers who benefit from this farcical tax-free bung? Why cannot winter fuel payments at least be taxed like the old age pension? That would raise £220 million a year to help people in real need in our country.

[Lord Freud]

Yes, my Lords, like the other 81 per cent in the Chamber I have to declare an interest in this matter, although I shall keep my tax arrangements between me and HMRC. One of the issues around taxation is that it is not straightforward to tax the winter fuel payment as it stands because it is a household payment whereas tax is done on an individual basis. It could be done but it is rather complicated.

Welfare Reform Bill

Lord Oakeshott of Seagrove Bay Excerpts

Wednesday 23rd November 2011 Grand Committee

[Lord Oakeshott of Seagrove Bay]

Perhaps I could help the Minister. Surely the answer is that when the universal credit comes in fully it will deal with exactly the point that the noble Lord, Lord McKenzie, is making. That is why it is such a good idea, but it will take a long time and cost a lot of money so this is an interim arrangement. Is that not the position?

[Lord Freud]

I welcome my noble friend’s support because he has expressed the argument much better than I possibly could.