Winter fuel payments to wealthy pensioners questioned by Treasury minister in leaked recording

John Glen
John Glen, the Paymaster General, argued that his own mother should not be getting the financial support - Hannah McKay/Reuters

Winter fuel payments to wealthy pensioners were questioned by a senior Treasury minister, The Telegraph can reveal.

John Glen, who was then chief secretary to the Treasury, said at a Cambridge University Conservatives event that the money would be better spent tackling child poverty.

Mr Glen argued that his own mother, who he said was “perfectly comfortable”, should not be getting the financial support, though added rationing it would be “very difficult”.

The position articulated in private contradicts the Government’s public stance, which is that winter fuel payments should be given to all pensioners rather than only the poorest.

Means testing could lead to millions of pensioners losing out

Means testing the benefit could, in theory, lead to millions of pensioners losing out. Last winter, 11.4 million people received the winter fuel payment.

On Sunday, the Treasury insisted a change was not being announced at this week’s Autumn Statement, with a government spokesman saying: “That is not something we are going to do.”

The comments, captured in a recording, reveal that the Treasury has reconsidered long-held pensioner benefits with public finances squeezed.

On Monday, Rishi Sunak will give a speech declaring that the British economy has turned a corner, hailing the halving of inflation this year and talking up the need to now focus on growth.

Final decisions on tax cuts to be unveiled on Wednesday remain closely guarded. Moves on inheritance tax, income tax, National Insurance and stamp duty have all been speculated.

Payments range from £250 to £600

The winter fuel payment ranges from £250 and £600 and is for those born before September 25 1957 to help with energy bills. It was introduced by New Labour in 1997.

In public, government figures defend keeping the payment universal, which means all pensioners receive it regardless of their personal financial situation.

But Mr Glen expressed interest in a different approach at a gathering of Cambridge University Conservatives in St John’s College on October 26.

Mr Glen said: “I think we also need to come to terms with the fact that the triple lock is very expensive and how sustainable is that going forward in terms of pensions and all the other benefits?

“Because my mother, she’s not very rich but she’s perfectly comfortable. She just texted me today aged 75 to say ‘I’ve just heard about my £500 winter fuel payment’ and I’m just like ‘you don’t need that’.

“But finding a mechanism to try and ration that [the Winter Fuel Payment] is very difficult because our HMRC system will look at household incomes. These are the sorts of mechanics of government you’ve got to look at.

“Is it better if we spent more of that money on child poverty? It probably is. But these are the sorts of things I think we need to look at.”

Mr Glen moved in cabinet reshuffle

Mr Glen was moved in the Cabinet reshuffle last Monday and is now Paymaster General and minister for the Cabinet Office.

He declined to comment further when approached about his comments on Sunday.

The recording offers an insight into the conversations happening at the top of the Treasury as savings are sought, with both public spending and taxation levels rising in recent years.

While the Treasury ruled out changes coming on winter fuel payments on Sunday, there has been no such denial of a potential tweak to the pensions triple lock being considered.

The pensions triple lock, a flagship Tory promise at successive elections, sees the state pension rise by either 2.5 per cent, average earnings or inflation, whichever is highest.

Ministers considering different figure for average earnings

Ministers have been looking at selecting a different figure for average earnings - which right now is the highest of the three - than in the past for the increases coming next spring.

They are considering taking the figure for average earnings minus the impact of public sector bonuses, which is 7.8 per cent, rather than the overall figure, which is 8.5 per cent.

That would mean pensioners being as much as £74 out of pocket next year, compared with the previous approach.

Those Government figures backing the change are arguing that a unique spike in public sector bonuses, triggered by pay settlements over strikes, has skewed the figures.

The change had been locked in a few weeks ago, but now using the lower figure could be abandoned since it only raises half a billion pounds and could trigger a backlash from Tory MPs of the policy, one source familiar with recent thinking told The Telegraph.

On Sunday, Mr Hunt argued that the tax burden had to be lowered to get the British economy “fizzing”.

But he also appeared to play down the scale of tax cuts to come on Wednesday, saying: “Rome wasn’t built in a day.”

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