The Winter Fuel Allowance was an emotive part of the election campaign, with Labour accusing the Tories of planning to scrap it and David Cameron promising not to. At no point during that debate was it asked whether the WFA was a good way to spend money.
Our report earlier this year, Cold Comfort, examined in some detail the demographics of fuel poverty, as well as questioning the logic behind the government’s target. If you take the fuel poverty measure (those spending more than 10% of income on energy) as read, the last government failed utterly to achieve anything on it – as the graph below shows. They introduced the target when fuel poverty was declining sharply and were surprised when it bottomed out and started rising again. The failure to break the very close link between energy prices and fuel poverty suggests that the roughly £20 billion spent since 2000 on fuel poverty has achieved very little.
If the government wants to continue to give pensioners a Christmas bonus it should be honest about what the WFA actually is – an income supplement. If it actually wants to tackle the numbers of people struggling to pay their bills it should prioritise energy efficiency which will do a lot of the work. It might also want to reconsider some of its poor value for money climate change policies – such as the absurdly generous subsidies for micro-renewables (see our report, Greener, Cheaper) – which are paid for by all of us through our bills.
Robert McIlveen is a research fellow at Policy Exchange's environment and energy unit.