Pensioners and Winter Fuel Payments

Jim Shannon Excerpts

Tuesday 22nd November 2011 Commons Chamber

[Steve Webb]

My hon. Friend raises the important issue of take-up. Clearly, benefits such as cold weather payments and the warm home discount, which is the £120 off fuel bills in Great Britain, as I mentioned in the letter that I sent, are contingent on receiving an income-related benefit. That is a challenge that we always face. We want to target those who are most vulnerable, but if some of those who are vulnerable miss out on the passported benefits, how do we get that money through without spending it on everyone, resulting in it being spread much more thinly? That is a permanent trade-off and why we are looking at ways of improving the take-up of these benefits and having a mixed strategy—a mix of a universal winter fuel payment that goes to everyone regardless of whether they claim, and targeted help for those most in need.

As a Department we are working with organisations such as Age UK to try to make sure that pension credit materials are provided to them. Those organisations have responded positively to make sure that the literature we provide is easy to understand and reaches the people who need it. I entirely take my hon. Friend’s point that there will always be gaps, and we need to address that. My view in the long run is that if we can have state pension reform that guarantees a state pension above the basic means test, that will go a long way to addressing some of these issues, but perhaps that is for another day.

I do not want to go on too long but I will mention, briefly, the warm home discount. This is important because it is the subject of negotiation between the Government and the big six energy companies in Great Britain that will give £120 off the electricity bills of 600,000 of the poorest pensioners. That will make a real contribution. We do it through electricity bills because pretty much everybody has an electricity bill, not because we think the price of electricity has necessarily gone up more, but it does not apply in Northern Ireland.

There is an interesting question about the negotiations or discussions between the Northern Ireland Executive and Power NI, for example, about whether the Northern Ireland providers could be asked to do the same sort of thing. If the big six are doing it in Great Britain, I cannot immediately see why the same should not benefit pensioners in Northern Ireland. Perhaps right hon. and hon. Members could take that back and challenge their own power suppliers to do more.

Clearly, we need to make people aware not just of the means-tested benefits they can get, but of the help with insulation, cavity walls and so on. Further in response to my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood), we as a Government are sending letters to about 4 million of the most vulnerable energy customers, letting them know that they have access to heavily discounted insulation for their lofts and cavity walls. Even when we write directly to people, we do not always get the results that we want, but we are aiming to target people directly.

[Jim Shannon (Strangford) (DUP)]

Is the Minister aware that 43% of those over 75 years of age live in unfit houses? Is that not a group that he should target specifically?

[Steve Webb]

Perhaps I was not explaining myself clearly. There is a whole raft of things that we are doing precisely because low-income households cannot afford the large capital costs of insulation. There is the green deal, the letters that we are sending about subsidised insulation, cavity wall insulation and so on, and the measures that we require the energy companies to take under the carbon emissions reduction target, the CERT scheme. There is a whole raft of things that we are doing, precisely because of the point that the hon. Gentleman makes, which subsidises insulation. It is perhaps a misnomer to talk about that as being long term. Someone’s house can be insulated tomorrow, which will mean savings on their heating bills. It will take a long time to work through the whole housing stock, but that has an immediate and beneficial impact on people today. Perhaps “long term” was not quite the right phrase.

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[Mark Durkan (Foyle) (SDLP)]

It is a pleasure to follow the hon. Member for Upper Bann (David Simpson). I commend him and his colleagues on bringing the motion to the House. In particular, I commend the right hon. Member for Belfast North (Mr Dodds) on the cogent and assertive way in which he moved the motion and anticipated many of the Government’s arguments.

The motion is timely and focused. Contrary to much of the debate, which has ranged far and wide along the full dimensions of fuel poverty, the structural condition of the housing stock, fuel prices and all those vagaries, the motion is focused on something under the control of the House and the Government: the decision on the winter fuel payments. We are clear that all those issues need to be addressed, and the measures taken by the previous and present Governments are to be encouraged, as too are other more far-reaching measures, but given the rampant rise in energy costs for older people and all the other pressures on their incomes, we cannot countenance complacency about the cut to winter fuel payments.

The decision on winter fuel payments represents a clear and present cut imposed by this Government. The Minister tried to argue first that it was not a cut, then that it was a Labour planned cut, but the fact is this: it is a clear and present cut for pensioner households already facing other pressures and difficulties. It is a sleight of hand for people to suggest, “Well, the Government were committed to doing what the previous Government did”, because really they said, “No, we’re only committed to doing what we think the previous Government planned, not what they did.”

The hon. Member for Thurrock (Jackie Doyle-Price) said that we have to talk to and listen to our pensioners. I have, and every single one has told me that the cut is an issue for them, and every single one is clear that for three years they received payments at a certain level, but that this year they will not get them at that level. That is a cut, and it is a cut from this Government.

[Jim Shannon]

Does the hon. Gentleman agree that this is at a time when they need it most?

[Mark Durkan]

Yes, of course it is at a time when they need it most, and it is not only the time of year when they need it most but the time in the economic cycle—with all the difficulties that people are facing.

We have heard some duplicitous arguments from Government Members. On the one hand many people talk about the difficulties with means-tested benefits and with supporting pensioners through pension credits, but on the other hand we have heard criticisms of the fuel payment and the fact that it is not means-tested or discriminatory. We have heard contradictory arguments.

Indeed, the Minister earlier argued against the whole scheme, structure and logic of winter fuel payments. He actually argued against the allowance altogether and said that better, more discriminating interventions were available to protect people against fuel poverty and to support more deserving pensioners. In the light of his logic, I wonder whether the Government plan fundamentally to review or redesign the fuel payment.

The previous Government introduced the single annual payment in 1998, but the first time I heard it advocated was in 1988, when my predecessor, John Hume, commended to the then social security Minister, John Major, the introduction of an annual thermal allowance to overcome many of the difficulties with the cold weather payments, their inadequacy and the poor and inconsistent triggering system. Thankfully, we got something similar with the winter fuel payment in 1998.

Over the years, the amount of money committed to the payment has changed and top-ups have been introduced. Pensioners have come to see those top-ups as a given, and considering what the Prime Minister said going into the election, they had every right to expect them to remain a given. The motion tabled by my compatriots in the Democratic Unionist party gives the House the opportunity to signal to the Government that that is what we want and what pensioners expect.

Many valid arguments have been made about how to tackle fuel poverty—improving energy efficiency, for example. Although some of those measures can be introduced in Northern Ireland at the devolved level, others need wider intervention from here. Those could include more up-front investment in energy efficiency retrofit schemes or VAT concessions, not least to stimulate work in the hard-pressed construction sector, which is not building new houses. There is an awful lot of work that people with construction skills could do to retrofit and improve existing houses, and there are many things that young people who want to get construction skills could do on such schemes. The Government need to think more widely about other measures to tackle fuel poverty, but they should not use the existence of other interventions as an excuse to justify this unjustified cut.

I shall not rehearse the statistics on the levels of fuel poverty in Northern Ireland that my colleagues have mentioned because other Members want to speak, and nor shall I rehearse the number of winter deaths from fuel poverty either in the UK at large or in Northern Ireland. I shall only make the point that those deaths are avoidable and that we need to take what steps we can to avoid them. This cut is avoidable.

The Minister asked, “Where else can the money come from?” I do not necessarily agree with some of the suggestions from right hon. and hon. colleagues, although I am glad that the Government moved on from some of the vanity projects—for example, the NHS IT scheme. Money could also be saved on Trident.

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[Jim Shannon (Strangford) (DUP)]

It gives me great pleasure to speak in this House on behalf of the elderly and those in need, and to address the issue of the winter fuel payment.

I read a statement the other day that said:

“The world is getting older. The UN has called the current global ageing trend a situation ‘without parallel in the history of humanity.’ Here in Northern Ireland, our very own society is ageing…An ageing demographic like this carries significant consequences for the fabric of our community. It changes how we plan the way we live; education systems, health and social care, work life, family life. It affects older people now and in the future.”

I am aware of the clear demographic changes in my constituency of Strangford, to which many people move to retire—it is a beautiful place to visit at most times, but it is also a nice place to retire—and where the issue of winter fuel payments comes up over and over again. It comes up because—let us be clear about this—winter fuel payments are not a luxury, but something that goes to pay for fuel, which, for most elderly people in my constituency, means oil. Therefore, the cost is greater than anywhere else. It is no exaggeration to say that literally hundreds of my constituents have spoken to my offices about this issue, and it is clear what they are telling me: winter fuel payments are critical for them to get through the winter.

Age NI has a vision for Northern Ireland and the United Kingdom:

“To create a world in which older people flourish,”

and:

“To enhance and improve the lives of older people”.

Those are the words of Age NI, but they should apply everywhere in the United Kingdom, and be taken on board by all the elected representatives in this place as well.

Age NI has three themes—health and social care; poverty; and equality and human rights—but this evening we are focusing on poverty. Poverty affects health and social care, and winter fuel payments and poverty affect equality and human rights as well. Although there are many ways of helping—my right hon. Friend the Member for Belfast North (Mr Dodds) spoke earlier about the pension credit, and the Minister responded in an intervention—we need a way of speeding the system up. The system needs a sense of urgency; I cite the number of times that I have to phone through to the pension credit system to ask for something to be done only for me to have to return to the problem a week later or perhaps the week after that. The system also needs less bureaucracy and paperwork.

The autumn spending review is an opportunity to put older people at the heart of Government policy and to plan for an ageing population. Northern Ireland has some 300,000 people of retirement age, who make up 17% of the population, and the trend is upward. Unfortunately, the figure will be 24% or 25% in a few years. The largest increase will be in what is sometimes referred to as the “older old”. It is not an “Irishism” to say that: it refers to those who are 80-plus, who feel the pain of winter more than most. Other Members have underlined that point today, stressing the importance of all those who fit into the pension bracket, but especially those who are 80-plus, of whom it is estimated that there will be some 130,000 in a short period of time. Again, that is a concern.

Two fifths of single pensioners and one fifth of pensioner couples have no income other than their retirement pension and state benefits. Whenever we put the issue in perspective, we see that the winter fuel payment means a whole lot to those people. Some 44% of my constituents are in fuel poverty. By the way, the same proportion of those entitled to draw the pension credit—44%—are not claiming it. When the Minister responds, I will be keen to hear her ideas about how we can ensure that they apply. One of the figures underlining this issue that came up in research is that average weekly unclaimed benefits are estimated at between £1.2 million and £2.3 million, which is a vast amount of money. It is important that we address those issues.

Some 23% of older people across certain parts of Northern Ireland are living in poverty, whereas the figure is 16% in the UK. The Minister referred to how we gauge the extra money in the winter fuel payment to reflect the temperature. I made the point in a Westminster Hall debate earlier this year that I drove from Greyabbey to Newtownards in my constituency, speaking to people along the way, and found different temperatures all the way up the road. Obviously the temperature is lower closer to the coast, but in certain parts of Ards it was below zero, while over in Ballygowan and Comber it was minus 3º or 4º. That is an illustration of how the temperature can vary within a 50 to 60-mile radius.

Why is it crucial that the winter fuel payment is made? Because a failure to do so will mean more referrals to the health service, with elderly care accounting for 21% of all the programme of care expenditure. I will not go into all the figures that others have mentioned, but I will make this point. It is important to make a “pre-emptive strike” when it comes to health, particularly through the winter fuel payment, which plays a clear role. For every death from cold, there are eight hospital admissions and 100-plus visits to GPs and health centres. When we add that to the figures, we know what we have to do about the winter fuel payment—it helps to avoid lots of those issues, too.

Elderly care expenditure per head for Northern Ireland is £2,086, while in Scotland it is £2,313 and in Wales it is £2,109. I would also like to make an important point—the hon. Member for North Down (Lady Hermon) made this point too—about Alzheimer’s and dementia. In some 26 years as an elected representative, I can never recall a time when so many people had dementia or Alzheimer’s. We therefore need to enable our senior citizens to enjoy a level of health that will not cost more later on. The winter fuel payment makes that contribution. The Government have stated that they will restore the earnings link for the basic state pension—that was indicated earlier. The income-poverty figures show that 23% of older people live in poverty, while the figure is 16% for the UK. Some 15% of people in Northern Ireland live in severe poverty—the figure is 9% in the UK, up 3% in the last year—while 30% of single women over 75 live in poverty, and 42% of those homes are condemned.

The winter fuel allowance is the biggest topic in my three advice centres. For those who qualify, the situation is simple. The price of oil has increased—indeed, it has never been as high. If the Government have any intention of reducing the winter fuel payment, balancing the books will not happen. Many OAPs have no income other than the state pension, as I said earlier. This was an issue last winter; it was an issue for me at the parliamentary elections a year and a half ago; it was an issue at the Northern Ireland Assembly elections back in May; and it is an even more critical issue today. I urge hon. Members to support our proposal.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Mr Weir, who is to resume his seat no later than 18 minutes past 7.