Cuts to Winter Fuel Payments in Britain for 2024/2025: A Political Miscalculation by the Labour Government
The Autumn Budget for 2024 was meant to be painful. It has so far lived up to its promise, inflicting pain on both the poorer recipients of what was hitherto a universal welfare benefit and also damaging the UK government’s own reputation in the process, all in the cause of dealing with immense “fiscal pressures.” Prior to the winter of 2024/2025, Winter Fuel Payments (WFPs) were automatically made to all households with occupants who had reached the State Pension age, irrespective of their personal financial circumstances.
Come this winter, things have changed. To be eligible for WFPs, recipients have to be born on or before 23 September 1958, to have lived in England and Wales during the qualifying week of 16 to 22 September 2024, and to be the beneficiaries of Pension Credit or other means-tested benefits such as Universal Credit, Income Support, Income-based Jobseeker’s Allowance, or Income-related Employment and Support Allowance. Around 10 million potential recipients have thus been denied of their WFPs for this winter, which the government reckons will free up £1.4 billion to be spent elsewhere. The chosen few will receive their WFPs sometime between 11 November 2004 and 29 January 2005.
The WFP, also known as the Heating Allowance, is a tax-free annual state benefit of either £200 or £300, payable to eligible households where the oldest person is either between 66 and 79 years old, or 80 or over, respectively. WFPs were introduced by the Labour government in 1997 as a universal benefit to help older people meet the costs of heating their homes in winter, as part of a government initiative to tackle fuel poverty among pensioners. They were extended to all pensioners from 2000.
One criticism of WFPs was that they were paid out indiscriminately, even to the wealthiest of households. Means-testing determines entitlement to this benefit based on assessment of a household’s income and capital. This seems a good way to target payments to those who genuinely require them. But there are some practical problems with implementation. Means-testing involves higher administrative costs and has the potential to leave behind vulnerable older people who are unaware of their potential eligibility, and possibly also too proud to claim. Linking WFPs to Pension Credit has also led to a surge in applications to the Department for Work and Pensions for the latter. Pension Credit can be considered a “passport” benefit, which in turn opens the door to other benefits, further increasing taxpayer costs.
Any financial gains for the government have been outweighed by the considerable loss of political capital. Cuts in WFPs have not been uniformly welcomed within the Labour Party, with as many as 53 Labour MPs abstaining in a 348 to 228 Parliamentary vote in favour of cutting WFP.
While WFPs may be ultimately considered a form of government subsidy for profit-seeking energy companies, it cannot be denied that they help boost the incomes of many older citizens during the difficult winter months. It must be remembered that the UK State Pension is one of the lowest in Western Europe, and that even the promise of the Triple Lock has not allayed the concerns of those being deprived of their WFPs. For those who could potentially benefit from WFPs but are ineligible, energy providers may be able to help, and charitable grants may be available, but all of this requires extra effort not all are capable of.
The media are currently awash with accounts of older people turning down their heating, confining themselves to a single room, wrapping up in multiple layers of clothing, and keeping warm in bed with hot water bottles, electric blankets, or even by cuddling up with their pet dogs. Inadvertently, the Labour Party has managed to be portrayed as an uncaring party, just at a time when it needs to regain the confidence of its supporters, not to mention the wider public.
Ashis Banerjee