Winter Fuel Payment

James Murray Excerpts

Tuesday 10th September 2024 Commons Chamber

[The Exchequer Secretary to the Treasury (James Murray)]

This is a serious topic and we know from the debate earlier this afternoon that it is one on which Members across this House and people across this country have strong feelings. We understand that. This is a difficult decision to have to take. By means-testing winter fuel payments, we know that we will be ending future payments to most pensioners while maintaining our steadfast commitment to protecting those in greatest need. But although they do not like to be reminded of it, Conservative Members know exactly why we need to take this step. Because it was Conservative Members—and, indeed, former Members of this House who have now been voted out by the British public—who did such damage to our country’s economy and the public finances. The legacy of the last—

[Dame Harriett Baldwin (West Worcestershire) (Con)]

On a point of order, Madam Deputy Speaker. This is the second Government Minister we have heard from the Dispatch Box today, yet only moments ago we saw the Chancellor sitting on the Front Bench. It was the Chancellor who chose to spend billions on setting up Great British Energy. It was the Chancellor who chose to spend billions giving pay rises to their union paymasters. It was the Chancellor—

[Madam Deputy Speaker (Caroline Nokes)]

Order. I thank the hon. Lady, but she will be aware that that is not a point of order; it is more of a speech that she is seeking to make. Perhaps she will find an opportunity to contribute in the debate.

[James Murray]

Thank you, Madam Deputy Speaker. The hon. Member who just intervened, and indeed everyone on that side of the House, might like to reflect on what the legacy of the last Government truly was. It was one of irresponsible overspending, of uncosted commitment after uncosted commitment, and of Ministers running away from taking difficult decisions. As a direct consequence, when we came to power we were faced with a £22 billion black hole in the public finances for this year alone.

[Paul Holmes (Hamble Valley) (Con)]

I am genuinely grateful to the Minister for giving way. He is a Minister at the Treasury, so I am hoping he will be able to outline some of the facts and answer my question. He will outline today that the saving made by cutting the winter fuel payment is £1.1 billion. If everybody accepted the means-testing that he is proposing, it would cost £3.3 billion, so can he outline to the House, despite the bluster that he has just made about saving money for the great British people, how it will save money when it will cost more under his proposals?

[James Murray]

I thank the hon. Gentleman for his intervention. The announced savings include an assumption of an increased take-up of pension credit, which is in line with the highest levels ever achieved. Frankly, if more people are taking up pension credit when they are eligible for it, we should welcome it because it means that support is being targeted at those in greatest need.

[Several hon. Members rose—]

--- Later in debate ---

[James Murray]

I am going to make some progress.

The Opposition did not like to be reminded of their legacy when they were in government, but let us have a look, shall we? What do they have to show for their years of reckless overspending? A failed asylum system, prisons at breaking point, more than 1 million people waiting for council homes, 4 million children growing up in poverty, and more than 7.5 million people on NHS waiting lists. This Government and every Member of this House who stood on my party’s manifesto were elected to turn things around.

[Kit Malthouse (North West Hampshire) (Con)]

Yesterday, in the other place, the Transport Minister cast doubt on the continuation of travel concessions for pensioners, which has caused significant alarm in my constituency and others. Notwithstanding the discussion we are having today, could the Minister reassure us that travel concessions for pensioners will continue under a Labour Government?

[James Murray]

I thank the right hon. Gentleman for his intervention. The Chancellor will take all decisions in the Budget on 30 October—[Interruption.] Let me make one important point to him as we approach the Budget on 30 October: we know there are going to be difficult decisions that we have to take in the Budget and, frankly, that is a direct consequence of the decisions taken by him and his colleagues when they were in government.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

As he is a Treasury Minister, I wonder whether he could help me with this question. How many of the pensioners who will lose the winter fuel allowance today receive less than the average train driver the Government have just given a pay rise to?

[James Murray]

I understand the political point that the hon. Lady is trying to make. But let me be clear. If she is talking about pensioners, the foundation of state support for pensioners is the state pension, which is why the Government have committed to maintaining the triple lock for the duration of this Parliament.

[Several hon. Members rose—]

[James Murray]

I am going to make some progress.

The triple lock means that pensioners are receiving £900 more this year. Figures released this morning indicate that they may get well over £400 more next year. Over the course of this Parliament, they will get £1,700 more under the state pension. That is the foundation of state support for pensioners.

[Several hon. Members rose—]

[James Murray]

I am going to make some progress.

We have seen clearly how Conservative Members do not like to be reminded of their legacy in government, of the mess in which they left the economy, our public services and the rest of our country after their 14 years in office. This Government and every Labour Member were elected to turn things around.

[Several hon. Members rose—]

--- Later in debate ---

[James Murray]

I am going to make some progress.

We are under no illusions. We know it will be a slow and difficult process when the damage goes so deep, but we are determined to fix the foundations of our country so that, on the bedrock of financial stability and fiscal responsibility, we can get our economy growing after 14 years under the Conservatives.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

I thank the Minister for giving way on the point about fiscal responsibility. I am not sure of the morality of trying to balance this country’s fiscal books on the backs of pensioners. He referenced the manifesto on which the Labour party stood at the election. “No austerity under Labour” was said in Scotland, so what should the 37 Scottish Labour MPs do in this vote? Should they bow down to the Chancellor, or should they stand up for their Scottish constituents?

[James Murray]

Every Labour Member was elected on a promise to restore economic stability and fiscal responsibility to our country, and it is on that basis that we will get the economy growing to make people across the country better off and to put our public services on a sustainable footing. I remind the hon. Gentleman that winter heating assistance is a devolved matter in Scotland. The Scottish Government intend to legislate to introduce a means-tested payment this winter which is equivalent to the winter fuel payment in England and Wales.

[Several hon. Members rose—]

[James Murray]

I have taken several interventions, so I will make some progress.

The point of this debate is to focus on why we have to take difficult economic decisions, even if they risk us being unpopular. We know that the universal application of winter fuel payments was already recognised as unfair. In the face of our dire economic inheritance, it is simply unsustainable.

We should be clear that, when the winter fuel payment was introduced in 1997, a higher percentage of pensioners than people of working age were in poverty. That is no longer the case. Put simply, there are now pensioners receiving winter fuel payments who do not need them and that is a reality we cannot afford.

Let me put it in financial terms. Over a quarter of pensioners have wealth of more than £1 million, half have wealth of over £500,000 and a fifth of pensioner households have gross incomes equivalent to £41,600 a year. That is why it is right to means-test winter fuel payment.

[Dame Caroline Dinenage (Gosport) (Con)]

Pensioners in my constituency will be saddened by the way the Minister is caricaturing pensioners as wealthy and not in need of this winter fuel support. Age UK has said that, in the Gosport constituency alone, 15,000 pensioners stand to lose their winter fuel payment. These are not wealthy people; they are people who, in many cases, are just outside the pension credit limit and are hanging on by their fingertips. Does he agree that caricaturing them as wealthy and not in need is unbelievably insulting?

[James Murray]

I think the hon. Lady unintentionally misunderstood my point. I will put the question back to her. Does she feel that pensioners who have wealth of over £1 million or who earn more than £41,600 a year should get the winter fuel payment in the context of the financial circumstances? The argument we are making is that, given the dire economic situation we face and given our dire inheritance, we should means-test the winter fuel payment.

[Several hon. Members rose—]

[James Murray]

I will make some progress, because it is important to explain why we are choosing to means-test the winter fuel payment. Means testing will allow us to make sure that those in the greatest need still receive the help they need. We will make sure that all pensioners continue to benefit from the triple lock, and we will start to deal with the shocking state of the public finances that we have inherited.

[Several hon. Members rose—]

[James Murray]

I am going to make some progress, as I have taken many interventions already.

Under our approach, those eligible for pension credit will continue to receive winter fuel payments. We want to target winter fuel payments to those on the lowest incomes, which is why we are linking the payment to eligibility for pension credit and other qualifying income-related benefits and tax credits. That is the right approach to help those on the lowest incomes. We are determined to make it as effective as possible by making sure that people who are eligible for pension credit make a claim.

[Jamie Stone]

The point I made to the shadow Secretary of State, the right hon. Member for Central Devon (Mel Stride), is a fair one. Distance and remoteness militate against take-up. People living in very remote hamlets in the highlands do not necessarily perceive the Department that they should. Can I have an undertaking from the Minister that the Government will look at this issue?

[James Murray]

I thank the hon. Gentleman for his comment, and I know that my colleagues are aware of this issue. In fact, it is one reason why the automatic payment of pension credit and other benefits is so important. For instance, the merging of housing benefit and pension credit would help to overcome some of the problems. It would help some of the people in the situation he describes. That merger of housing benefit and pension credit was first mooted in 2012, and was delayed several times by the previous Government—I think they intended to leave it until 2028. My right hon. Friend the Secretary of State for Work and Pensions is looking at that as a matter of great priority, to ensure that people get the help that they deserve.

[Several hon. Members rose—]

[James Murray]

I am going to make some progress.

The important point to focus on in this debate is making sure that everyone eligible for pension credit takes up that offer, not only so they receive the benefit of pension credit, but so that we can better target the winter fuel payments, given the financial inheritance that we have. We estimate that 880,000 pensioners are missing out on pension credit to which they are entitled, and frankly the Conservatives failed to act on that for years. That is why it is so important that we are now conducting a campaign to make sure that as many people as possible make a claim.

Our approach is already showing signs of success. The Government have received around 38,500 pension credit claims in the five weeks since the announcement on 29 July. That is more than double the number in the previous five weeks, and we will continue to do all we can to encourage pensioners who are eligible to apply for pension credit. We have used a wide range of media to reach pensioners and key stakeholders, and have been working with voluntary organisations such as Age UK and Citizens Advice, local authorities and the devolved Governments to raise awareness through their networks and channels. The Secretary of State for Work and Pensions is taking the further unprecedented step of writing to 120,000 pensioner households who are in receipt of housing benefit but who are not yet claiming the pension credit that they are likely to be entitled to.

Our national pension credit campaign will run right through until the application deadline on 21 December.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

On 11 February 2021, the temperature in Braemar in my constituency sank to minus 23°. Some 17,000 pensioners there will lose their winter fuel allowance through a decision taken by this Labour Government. Can the Minister explain to those pensioners in one of the coldest constituencies in the country why they have to surrender that important support at the same time as the Government have found £11 billion to give pay rises to their union paymasters?

[James Murray]

I would be interested to understand why the hon. Gentleman is backing a candidate to lead his party who supports the means-testing of the winter fuel payment. He might want to have a conversation with that candidate before he starts criticising our approach of targeting support at those in greatest need. The critical point is that the combination of the state pension rising under the triple lock with those in greatest need getting winter fuel payments alongside pension credit, not to mention the extension of the household support fund, means that the right measures are in place to give all pensioners the support they need.

Opposition Members want to know why the legislation is being progressed urgently. I will be really clear: it is urgent because we need to deal urgently with the £22 billion black hole—the huge in-year spending pressure—that we inherited from the Government that they ran. It is crucial that we act quickly to restore responsibility to our public finances and stability to our economy. On top of that, it was important that we made sure that regulations were in place at the start of the qualifying week for winter fuel payments, while wasting no time in doing all we can to raise pension credit take-up.

[Graham Stuart (Beverley and Holderness) (Con)]

We have heard that the Transport Minister yesterday could give no assurance to pensioners about their transport concessions. Last week, I asked the Deputy Prime Minister about the single person council tax discount. There is a very real prospect that pensioners could lose even more than £300—another £300 or £400. Will the Exchequer Secretary take this opportunity to reassure pensioners that there is no way that the Government will remove the single person discount from the council tax? It would be politically good for him and the Labour party, and it would be enormously important for people who need to hear some reassurance at this time.

--- Later in debate ---

[James Murray]

The right hon. Gentleman will not be surprised to hear me say that the Chancellor will take all decisions in the Budget. However, he might like to reflect on the record of his party in office on encouraging take-up of pension credit. We have been painfully aware since taking office how little the Conservatives did to increase take-up of pension credit during their 14 years in office. That is why it is so urgent for us to make progress in getting those eligible to sign up for pension credit. By doing so, they will get pension credit, which they may have been missing out on for years under the Conservatives, and they will continue to receive the winter fuel payment.

Pensioners may well be angry at the Conservatives for how little they did to get people to sign up for pension credit while they were in office. Pensioners may well be angry at the Conservatives for leaving the country with a legacy of a £22 billion black hole in the public finances.

We on the Government Benches are committed to protecting the triple lock. That will mean that pensioners on the full new state pension, who have received an extra £900 this year, will, pending the uprating review by the Secretary of State for Work and Pensions this autumn, receive a boost that could be worth well more than £400, so by the end of this Parliament they could be receiving around £1,700 more than they do today.

Conservative Members are keen to play politics with the tough decisions that this Government are taking. They are desperate to take attention away from the fact that, as people across this country know, it is the Conservatives who are to blame for the economic mess we have gained. They created a mess and now they want to criticise us for cleaning it up. If they had governed more responsibly, they might not have been sitting on the Opposition Benches, in opposition to a Government who are fixing the foundations they left to rot.

[Andrew Pakes (Peterborough) (Lab)]

Does the Minister agree that the only shameful thing in this debate is the legacy that the Government were left? It forced the new Government—[Interruption.] The reality that 800,000 pensioners are not receiving pension credit is a shameful legacy. If Conservative Members wanted to show humility and learn from their party’s record in government, they would acknowledge that they are the ones who crashed the economy, left the NHS in a way that pensioners cannot get to see a doctor, and broke NHS dentistry. Does the Minister agree that it is our job to fix the economy so that we can keep on helping pensioners?

[James Murray]

My hon. Friend is absolutely right. Frankly, it is time for Conservative Members to recognise and accept what they have done to this country, and to show some contrition and accept responsibility. However, no matter what the Conservatives choose to do, we are getting on with the tough decisions that are necessary in government. By changing the winter fuel payment and making it means-tested, we are beginning to take the necessary steps to address the black hole they created, while protecting the most vulnerable in society.

The Prime Minister has said that we must be prepared to be unpopular if we are to govern responsibly, which means facing up to tough challenges and tackling them head-on. The motion laid by the Opposition sets out several “regrets”, but they have never once shown regret for all the reckless decisions they took and the damage they did to our public services, public finances and economy. Our task now in government is to fix the mess they made and to give our country the chance of the better future we deserve.

[Madam Deputy Speaker (Caroline Nokes)]

I call the spokesperson for the Liberal Democrat party.