There is a thin line between political courage and masochism. The former involves having the honesty to tell it like it is, even if it is not what the audience wants to hear. The latter creates rods for the back which might sensibly be averted.
The furore over winter fuel payments is a case in point. People, by and large, do not like having money taken away from them, even if they don’t need it. So it was courageous for Rachel Reeves to recognise that the winter fuel payment is, in large part, a misguided waste which should have been reformed years ago.
Then we come to the masochism. Ms Reeves not only bought the argument but made it an instant article of faith that targeting winter fuel payments was urgent; a first order priority for the incoming government. Thus has the first billion of 22 concealed in the Tory black hole been accounted for. Only 21 to go.
A little more time and subtlety could have kept this action safely on the “courage” side of the divide. Maybe that will still happen. I suspect the Treasury lay in wait, urging rapid action before there was a change of mind. They will have been advising Tory chancellors for years to get rid of the winter fuel payment because of its cost and inefficiency. The Tories weren’t in the business of taking money away from wealthy pensioners, so nothing happened.
Now that Rubicon has been crossed, there should be time for refinement of both arguments and implementation. It is not beyond the wit of government before next month’s Budget to distinguish between the 27 per cent of pensioners who live in millionaire households and those closer to the other end of the spectrum who miss out on Pension Credit and will be genuinely disadvantaged.
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On the plus side, the current dispute sheds light on the inherent conflict between universalism and combating poverty. For more than 20 years, the winter fuel payment has remained stuck at £200 for under-80s and £300 for those above that age. This is recognition that it is an outlier which cannot even be allowed to keep up with inflation. If it had done, the current values would be c£370 and £550.
So which policy would have delivered the greater social good: paying, let’s say, 25 per cent of the pensioner population these inflation-linked sums or sticking with an unchanging flat rate for rich and poor? I’m pretty sure the answer would lie in paying more meaningful amounts to those who need them and scrapping the annual “bonus” for the rest. On that basis, the Treasury would save a decent sum and there would be a significant nibble at the poverty gap.
Being thirled to universalism makes such sensible, progressive trade-offs unthinkable and this has particular relevance in Scotland at present because of Social Security devolution. The Scottish Government has renamed its own scheme the Pension Age Winter Heating Payment. Extraordinarily, in my view, it intends to maintain the universalist principle rather than gratefully seizing the opportunity for reform.
This flies in the face of its own anti- poverty advisers. In response to proposed “like-for-like” replacement of the winter fuel payment, the Scottish Government’s Poverty and Inequality Commission spelt it out: “This cannot be considered a progressive policy instrument from an anti-poverty perspective … this particular instrument is extraordinarily poorly targeted as regards to addressing poverty”.
The Scottish Fuel Poverty Advisory Panel chipped in: “The WFP was set up in 1997 as a payment to help older people with energy costs during the winter period. However, the payment has never directly reduced energy costs, and has in effect become a tax-free state pension supplement (while) pensions have increased at a faster rate than other benefits due to the triple lock”. In other words, if fuel poverty is the target, don’t give the money to pensioners who are not fuel-poor, when many others in society are. Sadly, universalism does not countenance such logic.
It does seem odd that, given powers to model its own system of winter fuel payments, the Scottish Government opted for one which simply “mirrors” what already existed and, in the words of its own advisers, was “extraordinarily poorly targeted as regards to addressing poverty”. Here was an opportunity for Scotland to do things differently, according to its own priorities yet it again opted for not offending those who would lose out if “addressing poverty” was given precedence.
There are, of course, other options for addressing fuel poverty in a more coherent way than an annual subvention to pensioners. The surest solution is to get bills down and a large part of the answer to this lies, almost literally, on our doorsteps. I refer, of course, to the renewable energy revolution which is coming to your area soon, if it has not already arrived.
Chancellor Rachel Reeves has been courageous (Image: PA)
Again, there is a particularly Scottish dimension to this because so much power will in future be generated from the sea around us, as well as on land. Over the next decade, this should lead to cheaper electricity free from the volatility of internationally traded oil and gas prices. So far, so good. In the meantime, however, how can benefit be assured for consumers throughout the UK, and particularly in Scotland?
Reading the Second Reading debate on the GB Energy Bill in the House of Commons, I was struck by how many speakers raised the question of community or public benefit. There was a consensus that there must be more to this revolution than allowing multinational companies to build huge wind farms and then rake in gargantuan profits for the next 30 years. There must be a public interest involved.
Defining how that interest can be structured and translated into direct benefit for consumers is not a fringe issue but an urgent one which should be central to current policy making. Taking it seriously could also be a lot more politically profitable than arguing about which pensioners should get winter fuel payments.
Brian Wilson is a former Labour Party politician. He was MP for Cunninghame North from 1987 until 2005 and served as a Minister of State from 1997 to 2003.
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