Politics / Changes to fuel poverty payment will hit isles hard – Carmichael
THE SCRAPPING of the £300 universal winter fuel payments to pensioners will have unintended consequences to those living in fuel poverty, according to isles MP Alistair Carmichael.
The Orkney and Shetland MP was responding to the chancellor’s statement on public finances on Monday, in which Rachel Reeves revealed a £22bn black hole left by the previous Tory government.
Winter fuel payments will now be restricted to those on pension credits or other means-tested benefits, meaning less than half of those currently receiving the payment are likely to retain it this winter.
However, responsibility and administration of the payment will be devolved to the Scottish Government in September.
Public finance minister Ivan McKee has already warned that it would be difficult to continue with the universal nature of the payment, due to the funding shortfall announced by the chancellor.
Meanwhile former chancellor Jeremy Hunt accused Reeves of playing politics with the state of public finances and insisted the black hole existed because of policy choices made by Labour since they have been elected into power earlier this month.
While condemning the Conservative’s “reckless and irresponsible” economic management, Carmichael warned that the blanket change to winter fuel payments was the wrong approach.
“Restricting access to [winter fuel] payment only to those on benefits risks serious unintended consequences, particularly in the isles where our fuel poverty rates are amongst the highest in the country,” the Lib Dem MP said.
“We know that as many as a third of pensioners who are entitled to benefits do not claim them, so many may miss out even if they still have a right to the payment.
“Focusing resources on those in most need is a worthy principle in theory, but I fear in this instance it is likely to have harmful consequences.
“Fuel poverty does not work in the same way as other forms of poverty – as anyone in the Highlands and Islands knows all too well.”
Meanwhile, he described Labour’s policy on holding firm on the two-child benefit cap as “false economy” despite stretched public finances.
“There is a broad consensus that reversing the cap is one of the most cost-effective ways to cut child poverty,” he said.
“The government will, I suspect, eventually see sense and change course, but every day that they do not reverse the cap is another day in which children in our country suffer needlessly.”
The MP also commented on suggestions that the previous government chose to cut national insurance contributions despite knowing full well that it would create a hole in the public finances.
“I doubt there are many workers in low or medium paying jobs who feel they are not taxed enough currently, and it would be counterproductive to reverse those tax cuts right now, but it appears that the previous government was making major economic choices for entirely party-political reasons,” he said.
“Intentionally leaving the public finances in a mess in order to harm the next government undermines confidence in our institutions and basic norms of democracy.
“When parties act in their own interest rather than the national interest, we all suffer for it.”
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