One of EDRC’s main research themes is Equity, which focuses on understanding how different energy demand and governance solutions impact different regions, communities, households and individuals. This blog post takes an equity lens into the Government’s recent policy announcements on Winter Fuel Payments.
A simple Google search of the terms “equity vs. equality” reveals many different webpages that broadly differentiate between the two as follows: Equality means everyone is given the same resources or opportunities. Equity recognizes that each person has different needs and hence tailored resources and opportunities are needed to reach an equal outcome. It makes intuitive sense that energy policy aimed at helping people who are the most vulnerable, marginalized and disadvantaged should rather be driven by equity than equality.
UK energy policies have seen a number of interventions that have reflected more of an equality-based approach. One example is the Energy Bills Support Scheme that the Conservative Government introduced in 2022. Every household received a £400 rebate on their energy bill, irrespective of need for bill support, via monthly instalment. The National Audit Office stated this near universal support meant some people were supported who did not require assistance – creating a ‘deadweight’ and value-for-money risks.
In contrast, the new Labour Government recently announced that it would scrap the universal Winter Fuel Payment to certain pensioners. Everyone at state pension age had been entitled to a tax-free payment of at least £100 since 1997 (in some cases providing support to up to £300). The new chancellor, Rachel Reeves, announced in July 2024 that going forward only households with someone at state pension age and receiving Pension credit, Universal credit, Income support, Income-based jobseeker’s allowance, and Income-related employment and support allowance. This is much more in line with an equity-driven approach. It seems ludicrous to hand out money to those who don’t need it, especially in light of the huge societal problems we are facing after years of austerity, such as high levels of child-poverty and shocking health inequalities. Supporting those who need it the most and ideally supporting them more and better, is much needed.
So yes, this policy change was overdue and should be welcomed! But – and this is a big but – there will be households who now no longer qualify for the Winter Fuel Payment who used to rely on it and will feel its absence tremendously. Some households might simply be just outside the income-bounds for the various benefits, others might not know how to go about claiming pension-credit, and finally, others might shy away from wanting to apply for means-tested benefits in the first place. The charity AgeUK suggests that up to 2 million pensioners who would need the money to stay warm this winter will no longer receive it. While Reeves has announced a campaign to promote applications to Pension Credit, it is crucial that such a campaign happens now and that applications will be processed rapidly. But this might not be sufficient and other ways of monitoring what happens to energy use in households with state pensioners this winter will be vital.
So “yes, please” to more equity-driven policies but only if it can be ensured that targeting of those polices can be done successfully and that everyone who needs them, will get the support they are entitled to. Without this, we risk seeing more people having issues in affording their energy bills in the coming winter. This in turn can lead to more fuel poverty and potential self-restrictions in the use heating and hot meals with dire consequences on health and wellbeing.