Thursday, 21 October 2010

Winter Fuel Allowance: Did minister mislead Parliament?

The Telegraph this morning is reporting that millions of pensioners will get less than they were expecting when their Winter Fuel Allowance arrives in a few weeks' time. The bung - paid to millionaires and paupers alike - will be "reduced this year in line with plans announced by Alistair Darling, the former Labour chancellor, in his last budget", writes Robert Winnett. This means £200 rather than £250 for younger pensioners, and £300 rather than £400 for those over eighty. A nasty surprise, that, especially as George Osborne's words - and the general reporting of the Comprehensive Spending Review - implied that there would be no change.

What Osborne actually said was this:

We also keep the universal benefits for pensioners, in recognition of the fact many have worked hard and saved hard all their lives. Free eye tests; free prescription charges; free bus passes; free TV licenses for the over 75s; and Winter Fuel Payments will remain exactly as budgeted for by the previous Government - as promised.

I thought at the time that this sounded like a particularly sneaky cut - and Tweeted that it seemed like bad politics not to warn pensioners that their cherished allowance was being reduced by as much as a quarter. The difference between the two rates originates in Gordon Brown's love of political gestures: technically, for the past couple of years pensioners were given an extra, specially-announced "top-up" of the basic £200 or £300 rate, as a sort of Christmas present by a generous Labour government. Crucially, for technical reasons the calculations in Alistair Darling's March budget this year assumed the basic rather than the bonus rate of WFA, even though it was widely assumed that the bonus would be re-announced in due course.

So while George Osborne appeared to be saying that the WFA would be the same as last year, as far as pensioners are concerned it will be less. That is, at least, the natural meaning of his words, and how the Telegraph reported it.

But on Monday Steve Webb, Lib Dem minister of state in the Department of Work and Pensions, stood up in the House of Commons and said quite plainly:

In winter 2010, the winter fuel payment will continue to be paid at the higher rate of £250 or £400, according to family circumstances. Decisions about the rates for future winters will be taken as part of the annual Budget cycle, as normal.

Was this wrong? It's hard to believe that a minister would give false information to the House unless he himself - and his whole Department - had themselves been misled. Yet that would seem to be the implication of George Osborne's announcement. If he had intended to keep the higher rate to which pensioners have become accustomed, after all, would he not have said so unambiguously, if only to point out his largesse?

It's all rather confusing, especially since DirectGov is still telling pensioners that the rates will be the same as last year. I guess they'll just have to wait and see.