Latest news with #HelenWhately
Telegraph
4 days ago
- Business
- Telegraph
Starmer to pursue bereaved families for tax after winter fuel U-turn
Sir Keir Starmer could pursue bereaved families for tax after his about-turn on winter fuel payments. The Prime Minister promised to make more pensioners eligible for the winter fuel allowance after Rachel Reeves removed it from nearly 10 million people in 2024. Ministers are looking at restoring the payments as a universal benefit and then recouping the money from high-income pensioners when they fill in their tax returns. They have been forced down that route because creating a new means test would be highly complex. However, some in the Government are concerned about a time lag of at least six months between the payment of up to £300 being made and then clawed back. Thousands of people could die in that period, leaving grieving families to pick up the bill. Helen Whately, the shadow work and pensions secretary, said: ' Chaos reigns in Number 10 with pensioners picking up the bill again. It beggars belief that they're considering slapping a stealth tax on pensioners to clear up their winter fuel mess. 'Not content with that, they're going to come after the bereaved families of deceased pensioners for the money. This is the party that wouldn't stand up to the unions demanding inflation-busting pay rises. 'It's clear there is no plan, Labour just lurch from one disaster to the next. It seems that whichever way they go, pensioners end up battered.' In July 2024, the Chancellor announced that pensioners would not receive the winter fuel payment of up to £300 if they had incomes of more than £11,500. After a disastrous series of local election results, Sir Keir announced plans to hand the payment to more people but did not give any details on numbers. The Chancellor has said she will outline how the new system will work next week when she unveils the spending review, and promised the new system will be in place by this winter. A government source told The Guardian: 'We should never have scrapped the winter fuel payment in the first place, but the whole process of reinstating it has been completely chaotic. 'The optics of us demanding the money back from grieving families are just dire.' Asked on Wednesday about the winter fuel payment, Ms Reeves said: ' We have listened to the concerns that people had about the level of the means test, and so we will be making changes to that; they will be in place so that pensioners are paid this coming winter. ' We'll announce the detail of that and the level of that as soon as we possibly can. But people should be in no doubt that the means test will increase and more people will get a winter fuel payment this winter.' The option of paying to all then asking wealthier people to repay is a similar approach to that taken by Tory chancellor George Osborne when he reduced child benefit eligibility for better-off parents. A senior official at HMRC, Jonathan Athow, told the Treasury select committee that if the tax system were used to make the changes, it would not be possible until 2026. 'We'd have to get to April next year before we knew somebody's income, before we could then make any decisions about how [recouping the payment] would then be implemented,' he told MPs.
Telegraph
15-03-2025
- Business
- Telegraph
Labour's £6bn benefit crackdown is unambitious – it could save twice as much
This week, Labour is finally expected to unveil its plan to address one of the country's most pressing issues: welfare. With spending on health-related benefits for people of working age hitting an eye-watering £71 billion a year – exceeding the budgets for defence, education, and policing – it's been clear for some time that reform is no longer optional. It should not have taken them this long. When I was work and pensions secretary in the last government, I put in place a plan to fundamentally reform the system and stem the rising welfare bill. At the election we set out how we would build on those plans to save a further £12 billion per year. Labour accused me of being 'divisive' and when they came in, they ditched, delayed and dithered over the reforms they inherited. Now they have been forced to take them back out of the drawer thanks to the fiscal bind they have got themselves into. The Government looks set to propose £6 billion in savings. But with welfare spending projected to rise by a further £14 billion over the next five years, even £6 billion in annual savings would be completely insufficient. It means the Government is still planning to allow welfare spending to continue to rise substantially. Helen Whately, the shadow work and pensions secretary, agrees with me that this is not about political point-scoring – it's about ensuring the long-term sustainability of the welfare system and restoring fairness, making sure those who can work, do work. The system was never meant to be a permanent crutch but rather a safety net for those in need. However, it's become an unintended long-term solution, reducing the incentive to work and creating a culture of dependency. Labour should have addressed this issue head-on at the Budget. Indeed, they should have come into power with at least some semblance of a plan as to how they would deal with the problem. Now they are scrambling to announce a hastily cobbled together set of measures to save the Chancellor's blushes at her emergency Budget in 10-days' time. The most significant driver of ballooning welfare costs has been the rising number of people out of work and claiming benefits for a health issue or disability, particularly since the pandemic. There has been an especially steep rise in mental-health cases. There are many positives to the increased awareness we now have of the importance of mental health, but we must avoid over-medicalising everyday challenges and inadvertently perpetuating the problem. Currently 65 per cent of those undergoing a Work Capability Assessment are deemed unfit for work, a sharp increase from only 20 per cent in 2011. This doesn't reflect so much a decline in the population's health, but rather a system too quick to write people off. There are now around 2.5 million people on the highest tier of benefit with no work-related requirements at all. The reforms I put in place would have abolished that category entirely, doing away with the Work Capability Assessment and with it the binary system which has left those people on long-term benefits rather than receiving tailored support to move towards work. That reform was due to begin rolling out next year, and in the meantime, we were tightening up the assessments to reduce the numbers being signed off by 450,000. But Labour has prevaricated and delayed, while every day more people are told they are not fit for work. Conservatives in government were also taking forward reforms to the 'fit note' system, where GPs are signing off 94 per cent of fit notes as not fit for work. We need a shift in attitude – one that focuses on what people can do, rather than what they can't. Again, this agenda seems to have stalled under Labour. The Government has talked tough about getting to grips with welfare, but in reality, their plans look set to be a watered-down version of what was already set to come into effect under the Conservative government. It is too little, too late. Take the plan I announced while in office, which would have ensured that an additional 80,000 benefit claimants would be required to look for work. This was a crucial part of moving people off welfare and into employment – a policy aimed at reducing long-term dependency and encouraging those who can work to do so. But what has Labour done? They've quietly scrapped it. Worse than that, in their rush to find quick savings, thanks to their economic mismanagement, they risk punishing those who are in the greatest need. There are reports that blanket freezes or cuts to some benefit rates are being considered. If that is their approach it needs careful consideration. The whole point of reform should be to rewire the system while focusing support on those who really need it. And blunt changes to benefit rates won't solve the underlying structural problems – that requires fundamental reform. If Labour grip welfare properly and bring forward principled reforms, then the Conservatives will support them. There are at least £12 billion of savings a year to be made, as we set out in our manifesto last year. This money could be used to row back on the reckless 'jobs tax' that is already seeing jobs cut, investment shelved and prices going up. If reports are to be believed, Labour's proposals risk being the worst of all worlds – rushed, unambitious and unfair.
