Means-testing the winter fuel payment isn't a terrible idea

Why should Tony Blair, Elton John and my mother get an extra £200 they don't need?

- JONATHAN PORTES

There are lots of bad arguments for ending the universal winter fuel payment to all pensioners - if we don't fill the fiscal black hole left by the Tories, the markets will punish us the way they did Liz Truss - but there are also some good ones.

The UK debate on this is hopelessly confused. Those who argue that it can't possibly make sense for the government to hand out non-means-tested benefits like winter fuel payments to rich pensioners rarely confront the logic of their arguments, which is to also means-test the state pension, not to mention to charge those who can afford to pay for universal services, such as the NHS.

Quite apart from the political and practical obstacles, there are extremely good economic reasons against this. Means-testing the state pension would effectively destroy any incentive to save for vast swathes of lower and middle-income workers.

But equally, those who argue against means-testing, either on principle or because of its undoubted drawbacks – that some recipients find it stigmatising, others will inevitably slip through the net, and that it requires a complex, expensive and sometimes intrusive bureaucratic process to administer – are equally unrealistic.

Paying a universal pension at a level that would lift all pensioners out of poverty (even, for example, those with high housing costs or energy bills) would require very large increases to the basic pensions, inevitably meaning higher taxes for workers.