WILL JONES
Labour’s raid on winter fuel payments has already cost the taxpayer £380m after a surge in benefits claims, analysts have warned, substantially eating into the £1.4 billion saving claimed by Chancellor Rachel Reeves. The Telegraph has the story.
Chancellor Rachel Reeves claimed in July that stripping the winter fuel allowance from some 10 million pensioners would save £1.4 billion a year, citing a £22 billion “black hole” in the public finances.
But analysis suggests a surge in pension credit claims following the Chancellor’s announcement has already wiped out the higher benefits bill budgeted for by the Treasury.
Last year, the Government paid out £5.5 billion in pension credit to 1.35 million households, which Sir Steve Webb, former Pensions Minister, said would make a “dent” in the revenue from the winter fuel raid.
But the furore around Labour’s decision to restrict winter fuel payments to only those in receipt of pension credit spurred thousands of retirees to claim the benefit for the first time.
Mel Stride, the Shadow Chancellor, told the Telegraph: “Labour’s approach to the increased poverty it is creating is to encourage more pensioners to apply for pension credit. But that is substantially eroding the savings.”
Since Ms. Reeves’s announcement in July, claims to the Department for Work and Pensions (DWP) surged to an average of around 9,500 a week, compared to a previous level of 4,000, according to DWP figures.
Sir Steve, now a partner at pension consultants LCP, said the previous level of activity kept the pension credit caseload stable, balanced by an inflow of new claimants and an outflow of pensioners dying.
He added: “There is no doubt that the surge in applications for pension credit will reduce the savings from this policy, potentially costing the Government more than £200 million per year in benefits for pensioners.
“But even allowing for this cost, the Chancellor will still see a meaningful saving from taking winter fuel payments away from around 10 million pensioners”.
The Department for Work and Pensions (DWP) budgeted for an additional 95,000 claims in the financial year, assuming an average annual cost per pensioner of £3,800.
It anticipated a surge in applications triggered by the announcement would cost £370 million a year, but analysts Policy in Practice said Labour had not accounted for so-called ‘passported benefits’ linked to pension credit, such as council tax support and free prescriptions.
The company said the true average cost for a pensioner is likely to be £6,800 a year, and that Labour had therefore already spent £388 million on additional benefits. Any further claims in 2025, it said, would eat into the £1.4 billion of savings claimed by Ms. Reeves.
Worth reading in full.
Stop Press: Twenty Labour councillors have quit the party and formed an independent group, accusing Sir Keir Starmer of “abandoning traditional party values”, citing concerns including the decision to strip 10 million pensioners of their winter fuel payments and proposals that would create new “mega councils”. The decision of the councillors on Broxtowe Borough Council in Nottinghamshire means Labour has lost control of the council, with its number of councillors down to six from 26.
This article (Labour’s Winter Fuel Raid Costs Taxpayers £400m as Benefits Claims Surge) was created and published by Daily Sceptic and is republished here under “Fair Use” with attribution to the author Will Jones
Featured image: Getty Images (modified)
••••
The Liberty Beacon Project is now expanding at a near exponential rate, and for this we are grateful and excited! But we must also be practical. For 7 years we have not asked for any donations, and have built this project with our own funds as we grew. We are now experiencing ever increasing growing pains due to the large number of websites and projects we represent. So we have just installed donation buttons on our websites and ask that you consider this when you visit them. Nothing is too small. We thank you for all your support and your considerations … (TLB)
••••
Comment Policy: As a privately owned web site, we reserve the right to remove comments that contain spam, advertising, vulgarity, threats of violence, racism, or personal/abusive attacks on other users. This also applies to trolling, the use of more than one alias, or just intentional mischief. Enforcement of this policy is at the discretion of this websites administrators. Repeat offenders may be blocked or permanently banned without prior warning.
••••
Disclaimer: TLB websites contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, health, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.
••••
Disclaimer: The information and opinions shared are for informational purposes only including, but not limited to, text, graphics, images and other material are not intended as medical advice or instruction. Nothing mentioned is intended to be a substitute for professional medical advice, diagnosis or treatment.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of The Liberty Beacon Project.
Leave a Reply