Winter Fuel Payments, Inherently Unfair!

The British Winter Fuel Payment (WFP) has been the centre to much controversy recently. However, this controversy may not be exactly what you expect when you look at recent benefits debates. Rather than being subjected to 'necessary cuts' the WFP has actually been subjected to criticism over how much is spent through the scheme. While the Government has made no signs of making cuts to this particular benefit, it is one of the only benefit schemes where a change would be widely regarded as positive. This is mainly because the payment scheme is automatically given to individuals who meet the age requirement without actually taking into account how much income that individual receives.

Before anything, let's have a look at the requirements of the WFP. To qualify for WFP you must be over the age of 60. Between the age of 60 and 80 a household can receive a maximum payment of £250, although is there are two people over sixty living together, the sum will be split between them. So, say they qualify for the maximum amount; each individual will receive £125 each. However if a person is over 80, the amount they can receive increases to a maximum of £400, all tax free of course. So a widower, living on their own, aged 60 plus and have had a significant payout from an over 50's life insurance policy, have a good pension and no mortgage, that is financially good but you still get the benefit, and do you need it? In 2009 it was estimated that the Treasury spent £2.7 billion on 12 million people in that year alone. Unfortunately, WFP has been subject to various petty politics; as the previous Prime Minister increased the amount a person could receive just to put the wind up the sails of the conservatives. In 2008 he added an extra £50 for people aged between 60 and 80 years old and an added £100 to those older than 80. While this was initially to be a temporary rise, Chancellor George Osborne actually made it permanent decision.

However, various celebrities have hit out at these increases, including Lord Alan Sugar. Peter Stringfellow was recently quoted as labelling the system as "a joke" and that he was "embarrassed" to be even receiving the payments at all. While the Bishop of Jarrow, Rev Mark Bryant actually gave his WFP to charity, highlighting that "there are others ... who need it more".

The bishop highlighted that there are 4 million households in fuel poverty in the UK (houses that have to spend more than 10% of their monthly income paying gas and electricity), these are households that do not qualify for the WFP, while Bishop Bryant highlights that 80% of the recipients of WFP's do not need the payments. Bishop Bryant giving his payment to charity seems to be a growing trend; a couple in Leicestershire set up the 125 fund as they didn't need their WFP and encouraged others to donate their payments to this charity also. The Somerset Community Foundation is pretty much the same, Michael Eavis, the founder and runner of the Glastonbury Festival donated his WFP to the foundation. The foundation also discovered that out of the 149,600 people who receive the WFP in Somerset, only 33,000 of them were in fuel poverty.

But it's now that the real problem emerges, do we focus our efforts on the quarter of OAPs who are struggling to cope even with the additional financial help, or do we help those who are considered to be in fuel poverty? That is one difficult decision to make. A 2010 report revealed that an average 25% of OAPs who live in rural areas are actually paying more than necessary for their heating in winter just because there is a lack of main gas supply in the British countryside. In this case you could infer that it is indeed the old aged pensioners who suffer the most when it comes to the inefficiencies of the WFP scheme.

Further statistics support this and make some pretty dark reading (prepare yourself!). In the winter months of 2008/09 nearly 26,000 old aged pensioners died in England and Wales alone; an extra 2760 died in Scotland. These shocking numbers have undoubtedly contributed to the fact that the UK has an ever higher number of winter deaths than even colder European countries such as Sweden, Germany and Finland. This is supported by statistics released by The Environment, Food and Rural Affairs Committee which show that the rise in OAP deaths from summer to winter is 7% higher than the seasonal rise in Germany, Finland and Austria.

The energy companies, it takes something to be more hated and despised than the bankers and banks at the moment, but the big six energy companies have managed it. In the period 2004-2008, energy bills have risen a whopping 80% (yes, 80% in 4 years, the figures are from the Department of Energy and Climate Change), this is mainly due to climate change and green policies, but that is a later discussion.

How could we forget one of the tabloids favourite outrages as well, that thanks to the EU, those British citizens who have retired abroad to an EEA country such as Spain, Greece, and France can claim WFP. Amazingly, expats living on tropical islands such as Martinique, Guadeloupe, French Guiana and Reunion (in the Indian Ocean) can claim WFP as they fall under the Overseas Department for France, meaning they are classed as being in the EEA. In contrast, if you are unfortunate enough to live in the Channel Islands or the Isle of Man, you are disqualified from claiming WFP, the payments to 30,000 expats who "qualify" for the WFP amounts to £5 million a year from British taxpayers.

Vince Cable was reported as saying that the government "haven't yet done the winter fuel payments, but it's coming, I think". This was found as a result of an undercover report conducted by The Telegraph Newspaper last year, but still the government don't seem to have acted in the way implied by Cable. However, with spending cuts still being a major part of the UK's consciousness at the moment, there is still hope that the WFP will follow the suit of other benefit schemes and be geared towards those who need it.

However, if the government have any sense they would divert the money saved to those OAP's who are still struggling with fuel payments, I know, unlikely isn't it? But the other alternative is to reduce the amount of green taxes and climate change acts, which the energy firms are just passing on to customers, the vast majority of these green initiatives are failing anyway. So there you have it, the system is screwed up thanks to the most noble of intentions in its defence, but reform is needed to help those that need help, get help, which means sacrificing the ideal of universal benefits for all, paradoxically, for the most noble of intentions also.


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