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Chancellor Rachel Reeves has been warned that her plans to means-test winter fuel payments will not be possible because of ageing computer systems.
Former pensions minister Guy Opperman, who ran benefits for pensioners between 2017 and 2022 and looked at means-testing the winter allowance, has issued a warning that the system in the Department for Work and Pensions (DWP) cannot cope with the changes Ms Reeves has proposed.
The chancellor announced that she would save almost £3bn by ending winter fuel payments – worth between £100 and £300 – for those not on pension credit.
The decision means around 10 million out of the 11.5 million pensioners who received the payment will no longer get it.
Additional cost of living payments worth up to £600 were also made to households in the winters of 2022-23 and 2023-24.
Ms Reeves’s announcement was met with gasps in the Commons from MPs and shouts of “shame”, but she insisted: “If we can't afford it, we can't do it.”
Age UK has warned that at least 2 million pensioners who need the help will no longer be receiving it.
And in a thread on X/Twitter, Mr Opperman has explained why he believes Ms Reeves will be forced to U-turn on the plan.
He wrote: “I was the minister in charge of this policy at DWP from 2017 to 2022. Labour are making a big mistake.
“Our benefit system ... is a big beast made up of 12-plus ageing computer systems and thousands of admin staff. It does not do nuance and fine margins. The state pension and add-on benefits - winter fuel payment, Christmas support etc are one-off payments.”
He went on: “Over the last few years, the Conservative government added an extra £300 cost of living winter fuel payment support to all pensioners, meaning they got £500-£600 in winter fuel payments. This is also not being renewed by Labour. So the £500 to £600 loss to a pensioner on state pensions is huge.”
He said that whether the £22bn black hole Ms Reeves identified truly exists, and whether she had to pay inflation-busting wage increases for public sector workers of between 5 per cent and 6 per cent, was a different debate.
“But the government choice is to pay for this using money paid to support vulnerable pensioners during cold winters,” Mr Opperman added.
“I know the DWP civil servants who are advising the ministers. They know you cannot means-test the winter fuel payment, save money, and not avoid big gaps in support. The reason is because, while we all agree multimillionaires should not need winter fuel payment support, people who have only the state pension do need this support. The error is Labour is targeting both these groups. Their exceptions are way, way too narrow. And this relies on pension credit applications filling the gap.”
Opperman was also minister for pension credit and spoke of how difficult it was to get people to apply for it.
“Myself, the DWP and other ministers worked ceaselessly to drive up applications and take up. We campaigned in a multitude of ways from advertising in post offices, media campaigns, letters to pensioners, letters to local papers, and even enlisted [former Strictly Come Dancing judge] Len Goodman.
“We succeeded in increasing take-up. But still, hundreds of thousands of people did not apply. And the application is slow and complicated. It needs hundreds and hundreds of people to man any increase in this system. People, by the way, that the DWP do not presently have. But that is how Gordon Brown designed pension credit.”
He concluded: “So the reality is that between multimillionaires and state pensioners not on pension credit, thousands of pensioners will struggle to heat their homes this winter; I know hundreds of my former constituents in Northumberland will struggle this winter.
“One thing is sure. This policy as presently proposed will not last. I am afraid the ministers should listen to their civil servants on this one.”
