“When the facts change, I change my view, what do you do?”

2nd Oct 2017

 

I put my hand up at the outset, I voted for the Winter Fuel Allowance to be universal and campaigned to keep it that way. When it was introduced, pension poverty was a key target – so a non-means tested income, paid as a lump sum was politically very attractive.

Indeed the politics are still favourable to such a scheme. But listening to Radio 4’s “The Money Box” this week, I did wonder whether it was time to reconsider.

I say this having spent time last week assessing bids to support fuel poverty alleviation measures as part of the Warm Homes Fund. Judging how best to spend up to £50 million after receiving several hundred bids, brought it home to me that we (and by that I mean the country) needs to do more. And the Winter Fuel Allowance is not the best targeted means of tackling fuel poverty.

So why are we here? Well, the simple truth is that there is no Government-funded energy efficiency scheme running in England (there is in Wales and Scotland) and the sad reality is that installed measures have plummeted in recent years. So where does the Winter Fuel Allowance come into it?

The radio programme I heard looked at options around its future. Politically it would be “brave” to scrap it, so I wouldn’t suggest that. Having it means-tested, so only the least well-off received it, would risk thousands of people not claiming it (pension credit is currently under-claimed for). So what about keeping it; adding it to the state pension which is taxable? This means the poorest pensioners get to keep the full value of the allowance (£200 basic, £300 over 80s). The richer pensioner gets taxed on the value of the allowance. 

The House of Commons library produced a report on this, suggesting that this approach would raise £250 million a year. Now that’s only a fraction of the sum needed to eliminate fuel poverty but if that amount was spent by the Government, it might get support from those who see fuel poverty as a problem we need to solve.

Best wishes

Mike Foster, CEO