My Lords, I, too, congratulate the Minister on her appointment and I declare an interest as a beneficiary myself hitherto of the winter fuel payment—but only in very recent years. Indeed, I wonder whether your Lordships’ House should not pass a resolution declaring a corporate interest. Members of this House are unlikely to be seriously affected by the measure. That is not the point. For many pensioners in my diocese and for considerably larger numbers, possibly extending to millions, across the country, this will be a significant financial hit, with adverse repercussions this coming winter.
As has been alluded to, the origin of the Chancellor’s decision to cut winter fuel payments lies in her view of the state of public finances. It is not a manifesto commitment. The Minister, for whom I have enormous respect, has appealed to the House to neither annul the regulations nor express regret, but I suspect that there are those on the Government Benches who are internalising their regret at this very moment. I fear, and I think this feeling is shared across the House, that the Government’s decision on this matter will define them in the public mind for years to come. It is a signal gesture on their part and one that I believe should be resisted, notwithstanding the Minister’s careful appeal.
First, all Governments should take scrupulous care with our public finances, and it is true that the national debt is now at a level not seen since the early 1960s. But a third of our national debt is owned by the Government themselves through the exercise known as quantitative easing. Secondly, deficit financing, investment, growth and reductions in debt went hand in hand in the decades following the Second World War. Thirdly, the principle of universality in public benefits, as here, is one that is being steadily eroded.
The advantage of a universal benefit is simplicity in administration, the certainty of application and the absence of a social stigma. Means-tested benefits attract doubtless unintended stigmatisation, with a burden to both applicant and state in terms of administration and, inevitably, a failure by those eligible to take up the benefit. Despite the sharp increase in those applying for pension credit, it remains the case that a significant number of people eligible for the credit have not applied for it and would not wish to seek special treatment, as they see it, by so doing.
The Beveridge report in 1942, at a time of desperate stress, identified five giants that needed to be slain on the road to reconstruction: want, disease, ignorance, squalor and idleness. The prescription for their demise was universal, as had been all the great reforms of the previous century, from public parks to museums and galleries, free lending libraries, open-air concerts, healthcare, pensions and unemployment benefit. Those principles were extended after 1945.
The prescriptions in more recent years have been of restricted access, increased commodification and means testing. Of these, means testing is always the costliest option. They have accompanied low growth, increased inequality and an atrophy of positive outcomes. After a wide consultation, the proposal suggested by other Members to make the payment a taxable benefit clearly has much to commend it.
I shall listen to your Lordships with care, but I am minded to vote for the Motion in the name of the noble Lord, Lord Palmer of Childs Hill, if not for that of the noble Baroness, Lady Altman.