Coffee House

The winter fuel payment silliness continues

27 December 2012

On the subject of welfare, while the Lords debates whether a disabled person who can walk further than the length of a cricket pitch is allowed help with their transport costs, a minister has rather neatly highlighted the mess another part of the welfare state has ended up in. Nick Hurd told the Telegraph that he would ‘congratulate’ pensioners who donated their winter fuel payment to charity. He said:

‘The government is going to stick to its commitments. But if people take their own decisions that they want to use [the money] for good, of course, as minister for charity, I would support, congratulate and encourage them.’

When I last wrote about this, former Number 10 adviser Sean Worth reminded me that the reason the Tories had made their commitment to keeping the Winter Fuel Payment because Labour had backed them into a corner by running a scaremongering campaign suggesting the party wanted to scrap pensioner benefits. Labour continues to insist mulishly that winter fuel payment is an efficient benefit and that it would remain safe if they were in power. More fool them, but it’s a funny old world when a Conservative-led government finds itself encouraging people to use their benefit payments for a purpose that they aren’t intended for, isn’t it?

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  • Coffeehousewall

    How about not taking money from retired folk so that those with a residual income don’t need to be given some of their own money back?

  • barbie

    What we should be doing is giving pensioners a living pension where they can afford to pay their heating bills without aid. At the moment we are the poorest paid pensioners in Europe. You cannot go out and get work, and even if you did who would employ you, unless you already have a job. I know I’ve looked for work and can’t find any, and I’m in my 70s. I’ve always worked and supplied myself with money for my needs that’s how I was brought up, the heating allowance is used for just that, heating my home. Without it life would be much harder at this time of year. There are many like myself, and most are women who could not build up good pensions with having children and staying at home. Now it is very different.
    Are we to be like the rest and put on the wayside as we get older and less able, if so what as this country come to? We are not that poor if we can afford 11 billion foreign aid.

  • John Ball

    I suppose it makes up for a bit of the interest that I should have been getting on my savings. We oldies don’t get many breaks these days.

  • Arthur Dent

    It’s not welfare it’s a small tax rebate.

    • Thick as two Plancks

      Quite so! I regard it as a rebate for all the green taxes imposed on my electricity bills because the government does not want to make them visible as income tax.

      Indeed, perhaps they should give the fuel rebate to everyone, not just the oldies. Or even better, scrap all this green nonsense.

  • Iain Hill

    How many ministers have donated equivalent sums to charity?

    I think more people would consider this if the government had tackled rampant overcharging by the fuel utilities, and set fair prices for gas and electricity.

    By the way, Hurd can congratulate me. I gave mine to Crisis at Christmas. I challenge him to do likewise.

    • HFC

      I passed my WFA to my son to assist him in paying off his student loan. I receive no congratulations, just thanks.

  • jasonjapanwhite

    “The length of a cricket pitch”
    I mean, come on Luddites. So what would that be as an objective measurement?

    • Thick as two Plancks

      Twenty meters is the objective length of a cricket pitch.

  • TomTom

    This payment was introduced rather than raise the worst State Pension in the major EU states as a cheap work around. The fact that regulation of energy prices is weakest in the UK is a counterpart to the payment, and the further North you go the colder and darker it gets. Douglas Hurd’s son has probably never been in the Northern areas of Great Britain in winter

  • pigou_a

    Seriously, no body believes Cameron has protected the WFA, in real terms he’s cutting spending on the WFA by 30%.

    The figures from the DWP are very clear:

  • Framer

    Get rid of the Christmas bonus first.

  • Duke of Earl

    The WFP, bus pass and TV license benefits are a complete joke. OPAs already get the state pension, why don’t they pay for their own shit like everyone else?
    After all they voted en masse for the state largesse that has put us in this crap position.

  • HooksLaw

    Another post abut nothing.

    In order to make sure that the real needy get their payment it makes sense to make it universal. Are benefits taxed? If not then this would be one step to dilute the problem.
    The other issue is that if you make it means tested then along with all the other means tests it just is a disincentive to earn more and get on.
    I doubt that the likes of Lord Sugar claims his benefit, but even if he/they did it would be dwarfed by their charitable giving.

    • Stranger

      I think you may may find one does not “claim” this benefit.

      • HooksLaw

        I received a form asking me to claim it.

        • Stranger

          And I take it you declined.

          • Fergus Pickering

            I didn’t receive any form. Just a hundred quid. And I immediately paid it over to… my wife. The idea of giving it to the RSPCA or the NSPCC to fritter away on lawyers’ fat fees never occurred to me. Anyway it’s bloody cold in our house.. .

    • Davey12

      How about keeping energy prices down by getting rid of the green energy tax.

      Get rid of the winter fuel allowance, that would be a help.

      Instead of a moratorium on fracking energy prices would be falling by now, that would be a help.

      Doing this we could get rid of the winter fuel allowance altogether.

      The poor and needy would be better off,

      We could reduce the deficit and sack a few more civil servants.

      • HooksLaw

        A lot of public sector employees have already been sacked or not replaced.
        A sane energy policy would be a good idea.

        Insanity is likely to get a boost however with the appointment of Kerry as Secretary of State.
        it is popular to go all hysteric over Obama, but in this case his appointment has all the merits of a loony toon caper. Indeed I think Daffy Duck would have made a better appointment. But expect Kerry to ponce around flatulating about global warming. Just don’t expect him to turn the heat down on any of his homes.

  • Davey12

    This is yet again the nonsense of welfarism. Hand money out to bribe voters, only nasty people will have an issue. The idea that millionaires get a fuel allowance is total nonsense. Even more absurd is a politician telling those millionaires they should give this bribe to charity, why?

    The days of welfarism are coming to an end. Only when they can find no money down the back of the sofa will they stop spending.

    As we have seen George Osborne’s cuts have failed to reduce the public sector deficit. Real growth will never return to the debt fuelled Brown days. Real wages are failing to keep up with inflation. As no one will cut the public sector then the debt will be rising for many years to come. Demographic changes means we will have a permanent Labour government.

    You should be worried about your pensions. They will not be paid or they will be inflated away. Me, take every penny you can take out of you pension scheme when the time comes and keep it in the bank. Buy gold and prepare, least you will be in control. Check out Argentina they nationalised the private pension industry. Gave everyone the same state pension.

    • 2trueblue

      You are right about the pension issue. The time bomb is ticking away and those in the middle who have saved will be royally s…..d.
      Osbourne is unable to reduce the public sector as making people redundant in that sector eats into what he was going to save, thereby creating a bigger problem initially. The whole thing is impossible with the amount of debt we have and trying to stabilise it all is getting worse.
      There was no real growth in Brown/Blair/Balls/Milllipede days. It was all sham.
      The winter fuel payment is just a distraction.

  • 2trueblue

    Is this really worth another airing?

  • Stranger

    Is Nick Hurd related to former Tory minister Douglas Hurd? Jut asking.

    • Charles


      • Stranger

        Thanks for that and tackling my “irony” laconically.

  • LB

    Ah yes, in favour of the something for nothing society.

    Let the rich pay all the tax, but get no services.

  • Colonel Mustard

    Instead of the emotional blackmail about how I conduct my private business Nick Hurd and the other “nudgers” can kiss my ****

    • Rahul Kamath

      Lol, this bit of welfare is “private” dear Colonel? Whilst others are public?

      • Colonel Mustard

        I was referring to the charitable donations and “nudging” rather than the benefits so don’t chortle too much. You are of course at liberty to distort, misrepresent, presume and sneer as is your wont.

        • Rahul Kamath

          Or you could just write more carefully. Thx for the clarification.

          • Colonel Mustard

            Says the one who writes in teenager text speak.

    • eeore

      You clearly misunderstand. If you are in receipt of any kind of welfare, that the previous foisted on the population in a subversive campaign of price control, it is the duty of the government, and various mouthy know alls, to tell you what you can and cannot spend that money on.

      Whereas, no one has any say in how the government, and the same mouthy know alls, spend public money.

      It’s called democracy don’t you know.

    • mikewaller

      Particularly for someone so sensitive to what is said of him, this is an outrageous piece of crudity, not least because it brings to mind such a deeply unpleasant image. In my view, political debate in this country would be greatly enhanced if this kind of childish response were abandoned and politicians treated with the same degree of respect as what used to be called “a gentleman” would have afforded anybody else..

      The actual issue being addressed is of great importance. The horrendous economic mess we are in has largely arisen from decades of politicians of all stripes buying our votes by promising us things that we cannot afford as a nation. The winter fuel allowance presents the problem in microcosm. How does one persuade people who really ought to know better not to switch votes in pursuit of what is – for them – such a trifling amount? If it cannot be done with the comparatively wealth and the winter fuel allowance, what hope is there?

  • Stranger

    1. If we ran the (energy) economy properly, we wouldn’t need subsidies to poor pensioners, wealthy landowners with wind turbines, and people wouldn’t be cold in their own houses.

    2. Why should wealthier pensioners hand money over to charities; surely they have better things to do with the money which has already been administered by the government before giving it to charities.

    • LB


      Its tax on tax on tax.

  • Alexsandr

    leave it as it is. Just make it taxable. That would get 40% of it back from the richer pensioners. Not ideal but a start. And simple.

    • LB

      So you pay the tax, and then get taxed again when you get some of your money back?

      Then if you invest it, helping the economy grow, you get taxed on it.

      You spend it, you get taxed on it.

      If you leave it to your dependents, you get taxed on it.

      How may times do you want to tax it?

      All because the state’s running a ponzi scam and can’t pay its bills.

      • alexsandr

        Yes you are right. But they cant scrap WFA for political reasons so my suggestion was an attempt to be pragmatic.

        • Stranger

          Back in the 70’s we had a balloon debate at school. One chap playing Hitler was challenged by another protagonist as to why he (Hitler) had invaded Poland, and responded with the answer “political reasons” whereupon 30 odd school boys burst out laughing.

        • Stranger

          Wake up at the back and get with the programme. Pragmatism went out the window decades ago. We are post post post modern now.

        • HooksLaw

          No he’s wrong, and the state is not running Ponzi scam and can pay its bills. The state is in the process of cutting the excess of its structural spending.

          You are right. Taxing of benefits, or putting benefits into the pot of what is calculated for tax, certainly for higher rate pensioners like Fred Goodwin would solve the problem.

          On the other hand no doubt Jimmy Carr would pay it into the Cayman Islands.

          • LB

            It’s running a ponzi.

            Care to tell people what’s contingent about the state pension?

            What does it depend on, in order to get paid back 20% of what you’ve paid in?

          • TomTom

            Benefits are TAXED for those with Occupational Pensions because they are subject to Progressive Taxation

        • LB

          The pragmatic answer is this.

          Pay lots of tax? Yes

          Well bend over, we’re about to screw you.

          All the tax, none of the services.

          But I don’t want to be buggered.

          Bend over, you’ve got no choice.

          Bye bye then, I’m off. Bugger yourself.

          That’s what’s going to happen.

          What should happen is quite simple. If you make lots of money and pay the tax, I don’t care that you’re rich. The reason is that the tax your paying less the cost of the services (same as anyone else), means I pay less.

          So people will more and more do a Jimmy. Or a Margaret Hodge. ….

          So they can’t solve it.

          So first winter fuel payments.

          Then it will be the state pension.

          Then it will be the rich get excluded from the NHS, or have to make payments on use

          The it will be that if you are middle class you make payments

          And it will work your way down,

          Key workers exempted. After all, they are civil servants and on top of their pensions they need subsidised housing, medical care, ,… and bugger the peasants.

          • Duke of Earl

            You have made a great argument for scrapping ALL universal benefits/subsidies/services.
            This will lead to a much smaller govt and lower taxes for everyone, including the rich. Everyone can now spend their money how they see fit.
            I don’t understand the logic of taxing people and then giving them back a portion of their own money after the parasites in Whitehall have taken a cut!

            • LB

              So what happens to those that have paid into the system and are owed a pension?

              Do we hang them out to dry?

              Ah yes, that’s the plan. Otherwise they wouldn’t keep banging on about contigent liabilities.

              What’s contingent about paying the state pension?

              • Duke of Earl

                They didn’t pay into any “system”, their taxes went into general expenditure.
                NI was the worst possible system to provide retirement insurance, the whole system is a con.
                What should have happened was that there should have been a mandatory savings account created for everyone so there would have been some assets held for retirement. Effectively a national pension scheme.
                Or better yet, people can keep 11% of their income and invest that themselves. The govt shouldn’t be involved really.

                • LB

                  They did pay in.

                  Ring up the DWP, give them your NI number, and they will tell you how many years you are entitled to, on the basis of your contributions.

                  That’s paying in.

                  What’s happened is that the NI payments have leaked. They have been spent on things other than the entitlements. That’s exactly like

                  a) Taxation

                  b) Charges

                  c) A ponzi scam.

                  On top, you don’t get compound interest.

                  On top of the 11%, there is the employer’s contribution, for the benefit of the employee. In effect paid by the employee. It’s just like VAT. I bet very few here have paid VAT, its all paid by companies. That’s the direct analogy. However, everyone knows they pay the VAT, just as they pay the employer’s contributions.

                  On the solution I agree. Here’s a link as to what that means.


                  It shows what would have happened to a 26K a year worker.

                  The could have had a fund of 562K. Instead they get a state pension which if provided by a profit making insurance company costs around 130K. The difference is the cost of the state, the taxation, the charges, the leaking, the lack of compound interest.

                  So I think the welfare state lovers should be proud and stand up in front a room of 26K a year earners and tell them how lucky they are that they, the welfare state fans, have taken 430K off each of them, and they should be grateful.

                  I doubt they will make it out of the door.

                  Add on top what’s left can’t be paid, and you get the extent of the fraud.

                • Duke of Earl

                  It would seem we are violently agreeing with each other. People were sold a fast one on NI and the system should be unwound sharpish. I’d go along with Milton friedman’s suggestion and give everyone a bond for the PV of their pension and replace NI with defined contribution saving accounts.

                  PS- I still disagree that people should be entitled to anything just because they pay tax. You should be arguing to scrap the tax, not give people entitlements. Going as you are strengthens the socialist Left.

                • LB


                  However, the reason why I take the view relates to property rights.

                  If you have paid for something, you should receive it.

                  You’re argument is that its OK to deprive people of what they have paid for, and that’s the socialist view point. Each according to their needs, less my cut.

                • Duke of Earl

                  You’re looking at this wrong. Property rights relate to VOLUNTARY transactions of goods and services. Taxation is theft so the money effectively ceases to be your property once the state has it.

                  My point is that the state shouldn’t be taxing people for this to begin with! It is an illusion that paying taxes entitles you to anything. If you think about it, what would be the point of everyone being allowed to claim back all you’ve paid in? That would completely defeat the object of taxation.

                • LB

                  Well, I’d dispute it on legal grounds. There was a court case where women sued the DWP over their pensions. The DWP had changed the rules on the quite, and not told them. The court ruling was that the DWP were held to the information they had given out, not the rules they had kept quite about.

                  So that means we do have a legal right, and it is enforceable.

                  ie. If you have 30 years entitlement, and you don’t get your money for the state pension as it stands, you can sue, and you would win. What makes you think otherwise?

                  That makes it a debt. The size of those debts are not payable from any level of taxation. Even 100% taxation wouldn’t pay those debts. So they won’t be paid.

                  Not paying those debts is going to be catastrophic for most people in the UK. Think it through. No state pension. No welfare to replace it. Rampant taxation to try and pay anything irrespective of the damage. Riots and violence.

                  On what should be happening, I entirely agree. I did the calcs for a 26K a year earner. What would have happened if that median wage earner had put their NI into the FTSE.

                  Answer is a fund of 560K. State pension costs 130K from a profit making company. Total rip off, 430K from someone on 26K a year.

                  Causes are

                  1. No compound interest
                  2. Charges
                  3. Redistribution/taxation – call it what you want.

                • Duke of Earl

                  I agree that the state pension is a debt (hence the suggestion to replace them with bonds), but the govt will default on it. They have already partially done this by changing the retirement age.

                • LB

                  And the linkage with RPI to CPI. Another 20% on top.

                  It’s going to be partial defaults all the way to destitution.

                  Now I do agree with your funded suggestion.

                  I’ve done the calculation that people on median wage (26K) would have been 500% better off.

                  So I would suggest this.

                  1. Compulsorary savings. Goes against my libertarian leanings, but I think that when others can force you to give them money, I’d rather force them to save.

                  2.On retirement it goes into draw down.

                  3. On death, residual goes to your heir’s funds.

                  4. 50% of payments in, go to the spouse, funds ignored on divorce.

                  5. Only if the fund runs out, do the rest of us help. Guarantee for the state pension only.

                  So its just in time bail outs. No topping up of the fund if unemployed etc.

                  Poor and you die young, your heirs get the cash, which makes them richer.

                  One off bailout, just for those that need it means low admin

                  Uses existing tax set up, so no huge extra costs there.

                  Work harder, you get more.

                  Lots of money available for investment. Lots. Huge amounts. That’s really good for the unemployed.

                • TomTom

                  It was changed by Neville Chamberlain as Chancellor when the Fund became insolvent in 1935 or thereabouts

                • Angela Sullivan

                  The government has to be involved because otherwise if people are conned who picks up the bill?
                  Private pensions are notorious cons because by the time you find out that you were sold a really bad deal, the saleman and your money are very long gone. If your private pension fails to pay up, the taxpayer funds you.
                  (Or do you think that people who make bad financial choices should be left to starve in the street?)

                • Duke of Earl

                  Using an argument to help a tiny minority in order to justify a universal programme is just stupid.
                  After all just because a dodgy car salesman can sell you a dud car doesn’t mean the govt should step in and supply all cars. Have you ever heard of diversification of risk?

                • Rahul Kamath

                  I can’t think, of the top of my head, of any developed country that does not have a public pension system of some kind for the elderly. So anyone suggesting eliminating it in the UK should pause for a reality check. The reality is that no developed society is going to allow pensioners to starve/ live without some dignity. However undeserving that dignity maybe. Hence public pensions. The ‘conning’ involved in private pensions is true as well but can be fixed with better regulation/ information etc. The bigger problem is that people just won’t save enough if left to their own devices.

                • Realist

                  You are right about the NI being a con – in fact, it would seem from what has transpired in recent years that most government ‘schemes’ are a con. Having money siphoned off from the workforce for some questionable ‘benefit’ further down the line (that doesn’t materialise anyway) is fraud with a capital F and politicians of all persuasions are so adept at it. A shake-up of so-called welfare programmes is long overdue but I suggest you don’t hold your breath waiting for it to materialise. In fact, if Labour are returned to power (and that blood-chilling possibility is no longer remote) the bill for all this Utopian-like largesse will be even higher.

                • Duke of Earl

                  I think you’ll be surprised at the speed at which things can change.
                  Once the markets for gilts implodes, the govt will have no choice other than to scrap these entitlements.
                  Look at what happened to Canada in the 90s.

              • TomTom

                DEFAULT – it always happens. They used to get FREE long term care but noone notices any more

            • LB

              ie. There debts are so large, that they need to keep penal taxation in order to prevent riots, to pay the debts they have hidden off the books.

              That’s why HooksLaw is wrong. It’s a ponzi scam, and the state can’t pay.

              Here’s why it can’t be paid, and you can bet your last quid that HooksLaw won’t post numbers to contradict.

              Taxation – 550 bn a year.
              Spending 730 bn a year

              In otherwords a huge overspend. Are we going to get 30% cuts? Not a hope.

              What about the liabiltiies?

              1,100 bn of borrowing. That’s all the admit too.

              However, 100 bn is the expected cost of nuclear decommissioning. Paid for up front, its a liabilility or debt under any accounting system

              State pension, state second pensions are also liabilities. Civil service pensions, which is just deferred pay for past services, is also a debt. These come to 4,700 bn according to the ONS. Linked to inflation plus some more.

              PFI is around the 400 bn mark.

              Then we have the expected losses on the guarantees. Banks, BT pension, Post office Pension, local goverment pension (with large black holes), …

              It’s around 7,000 bn mark.

              14 times geared and a spending habit.

              There is no hope of lower taxes. However, you will get smaller government, smaller pensions if at all, ….

            • TomTom

              Yes…I favour Universal School Fees means-tested so ALL parents pay for education and general taxation can be reduced

      • Baron

        LB, quite, all this is chicken feed, the need for more big money by those in charge will never cease, it cannot cease, the talk about cuts is just a smokescreen, the culture entitlements is so ingrained it can no longer be brought under control within the domain of political discourse. Those on the receiving and administering end of it will not allow it to reverse.

        Brace yourself for a cunning move by the political tossers on the last massive chunk of wealth the unwashed still possess – the housing stock. Its value stands around £4tr, just one percent property tax pa would yield the Treasury a cool £40bn, cost the average householder £2,400 pa. The tax as proposed by the tossing Cable would sneak in first as one for properties of much higher valuation but, as happened with income tax, VAT, council tax, it will eventually embrace us all.

        It may also be the last straw that pushes the hoi polloi on the barricades.

    • ButcombeMan

      NO NO NO
      Do NOT leave as it is, the administration costs are astronomical and out of proportion to the benefit-typical Gordon Brown nonsense.

      It should be paid with the national old age pension in two tranches as a two part winter bonus. It should be personal not household based One payment end of November one end of Feb. That would make it subject to tax and make first payment at a later age.

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