Iain Duncan Smith prepares to cut winter fuel payments - by temperature-testing them. Why not means-test them?

By Matthew Barrett
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Iain Duncan Smith has found an interesting way to trim spending on winter fuel payments. The Daily Telegraph today reports the Secretary of State for Work and Pensions' decision to impose a "temperature test" on pensioners (his exact words were that he would "protect taxpayers’ money and bring in a temperature criteria").

The idea of this test was first reported in the newspapers yesterday, when it was reported that IDS was rebelling against "ludicrous" European rules that meant that winter fuel payments had to be made to the more than 400,000 British pensioners living abroad. Quite apart from the principle of having to pay benefits to those no longer living in the country, there was also the fact that many of those British pensioners are living in countries with less severe winters - thus negating the need for them to receive the payment anyway. Payments to British pensioners overseas was reported as costing £100 million.

Mr Duncan Smith's solution was to consider the aforementioned temperature test in order to measure the need (or lack thereof) for winter fuel payments amongst those in hotter climates. However, the Telegraph this morning reports a slight twist to the temperature test: it will also apply to those in the United Kingdom.

Iain Duncan Smith has, for some time, wanted to base the extra £10billion cuts needed from his budget on changing universal benefits so that the middle classes and higher earners do not receive unjustified handouts (child benefit for higher earners, for example), rather than balance his budget on the backs of the poor and vulnerable. 

Temperature - rather than means - testing the fuel payments is certainly one way of reducing the benefits budget. In Britain, the pensioners most likely to have their winter fuel payments withdrawn on temperature grounds are those living in South East England. Is it fundamentally correct to tackle winter fuel payments? Sure. Is it correct, essentially, to penalise pensioners in the South East? The politics don't look very easy.

Firstly, the obvious: the South East is a Conservative stronghold, and it's questionable whether it makes for good government politics to withdraw benefits only from the Conservative grassroots.

Secondly, another obvious point: well-off pensioners choosing to live in colder parts of Europe will continue to receive the winter fuel payments, while economically vulnerable pensioners living in the South East will have them withdrawn. Sections of the press will dwell on this unfair imbalance relentlessly, if IDS decides to implement this policy.

A third point: the South East is a region with a large population. But trimming benefits in the South East will not make a great deal of sense unless the Department for Work and Pensions moves to tackle winter fuel payments for rich pensioners across the Midlands, North, Scotland, etc. I don't like to reduce politics to the cult of "fairness", but it is undoubtedly unjust that a millionaire in Hartlepool would receive the payment, but a far poorer pensioner in Hastings would have it withdrawn.

Before the election, David Cameron promised not to cut pensioners’ benefits during this current Parliament. Whether one agrees with that promise or not, it would be broken by this temperature test proposal. It seems the right moment to seize the opportunity to trim winter fuel benefits up and down the country. If we can temperature-test, why can we not means-test?