John Major – 1985 Speech on Heating Bills

Below is the text of the speech made by John Major, the then Parliamentary Under-Secretary of State for Health and Social Security, in the House of Commons on 4 December 1985.

The hon. Member for Dundee, East (Mr. Wilson) has pursued the issue of heating in all its aspects for some time, and I congratulate him on his persistence. I hope that he will understand if I cannot congratulate him wholeheartedly on everything that he said. It is not so much what the hon. Gentleman said as what he did not say.

An acknowledgement of what the Government have done to help with heating bills would have been welcome. By any yardstick, the Government’s contribution has been substantial, whether in terms of summer or winter bills. It is appropriate to put that on the record.

The hon. Gentleman did not mention that the Government have committed many billions of pounds to social security and have kept major benefit rates ahead of rising prices since 1979. This includes considerable help to the least well off for day-to-day expenses, including ​ heating, through substantial increases in supplementary benefit rates. These rates rose by 6 per cent. over and above the rise in prices between 1979 and 1984, and they were raised again a few days ago. More specifically, there was no acknowledgement of the substantial sum of £400 million spent last year on heating additions. The money was directed primarily to pensioners on supplementary benefit, to the sick, to the disabled and to some other special groups. That is a substantial record. The hon. Gentleman did not acknowledge that that substantial amount was £140 million more in real terms than had been spent by any previous Government on heating additions. This substantial Government record is not inclusive of all that has been achieved. I am sorry that the hon. Gentleman, when presenting his case, was not able to make specific acknowledgement of this record.

Mr. Wilson

I do not wish to deter the hon. Gentleman from answering the principal case, but does he think that the Government have done enough, considering the rising trend of deaths from hypothermia and the misery that many elderly people face in their homes?

Mr. Major

I shall deal with that issue in the course of my speech.

The principle of weekly help with all living expenses, plus extra weekly help for those with special needs, is one that we plan to retain under the proposed reforms that will see the light of day in the White Paper shortly. I stress this because the hon. Gentleman clearly feels that, by changing the present complex system of heating additions, we are ending assistance with heating costs. That is not the position.

The income support scheme which we propose in our Green Paper in June will provide a better basis for regular weekly help for claimants. There will be basic personal allowances for normal living expenses, including fuel costs. There will be weekly premium payments for families, pensioners, the sick, the disabled and for lone parents. The premiums will be given in recognition of the fact that these groups face special pressures, not least with the cost of extra heating.

The fact that we shall not call the premiums “heating additions” does not mean that they do not exist, that the cash is not in the claimants’ pockets and that it cannot be used towards fuel costs. We expect that these resources will be used to go towards fuel costs and that income support, for a variety of reasons, will be a simpler and more effective means of help than the present complex system which has many defects, some of which the hon. Gentleman honestly outlined.

I do not disparage the substantial help given through heating additions, though their structure results in an uneasy alliance between automatic entitlement for pensioners on supplementary benefit and others and the complex rules about details of claimants’ health problems. The present regulations are quite mind-boggling in their complexity. The advantages which we believe will accrue from the income support scheme include the fact that we will avoid complexity and most important, the intrusive questioning that takes place before an entitlement can be determined. I believe that the hon. Gentleman will concede that that will be a substantial improvement on the ​ present position. I emphasise strongly that help will continue to be given to these groups through the special premia that we propose.

The hon. Gentleman spoke about high summer fuel bills, and I recognise that there are particular difficulties when bills are higher than usual. However, the problem must be put in context. Social security collectively costs many billions of pounds. It helps millions with their living expenses, and our aim is to ensure that that happens as effectively and simply as possible. Surely no one can dispute that over the years the system has become far too complicated and that that is not in the interests of claimants who receive assistance or those who run the system. It is clear that it is of no help to anyone. However, we shall make no progress in producing the right sort of rational, modern and helpful system that directs and targets help to where it is most needed if we try to tailor the weekly income that is provided for millions by introducing variations that are based on weather conditions, time of year or locality, for example.

Most people plan on the basis that they will spend less one week and more the next, and we should give social security claimants the credit of recognising that they do likewise. We shall continue to provide a level of weekly income that takes account of the recurring extra pressures that are faced by groups such as pensioners. That must be a more sensible and efficient way of providing help than increasing heating additions in the winter, decreasing them in the summer and increasing them again in the summer if the weather proves to be especially bad, as the hon. Gentleman has said it was during this summer.

The hon. Gentleman referred to the length of the heating season, and I understand the arguments that he has advanced. I have already explained that the help that we provide is geared to people’s needs year in and year out and not to providing higher levels of help at certain times of year. He implied that the heating season is generally longer in the colder parts of Great Britain than elsewhere. That followed on to a matter which he has raised before and on which he has some depth of knowledge, which is his idea of a cold climate allowance. That means, effectively, variable rates of weekly benefit depending on which part of the country someone lives.

I recognise the hon. Gentleman’s interest in this subject, and he knows that my colleagues have discussed it with him in the past. There are real difficulties. Ministers in previous Governments have seen strong arguments against any deviation from the principle of national benefit levels and I am bound to say that we can see the same arguments against them. Apart from heating, there are many regional price variations. It would be possible to make a similar case based on variations in transport or food costs, for example. There is a variety of other variable prices in different parts of the country and I have no doubt that others could point to variations that have an acute effect on the persons with whom they are concerned.

If we were in the business of trying to take a detailed and comprehensive account of all the variations, the task of setting and changing all the benefit rates each year would become impossibly complicated. I am sure that the hon. Gentleman will acknowledge that that is so when he has time for reflection. There is evidence that there is little variation between the amount spent on average on fuel by those who live in different parts of Britain. That remains true at all income levels throughout the United Kingdom.

I share the hon. Gentleman’s concern about hypothermia. Each winter we hear distressing accounts of old people —perhaps proud and independent people who are entitled to help but who for various reasons do not seek it, or who face difficulties in obtaining it —who suffer from the cold. I understand the problems and care about it as much as the hon. Gentleman. However, it is not reasonable to portray the Government —I think that the hon. Gentleman began to move in this direction when he remarked about help for farmers and not for those in need of heating additions —as uncaring and aloof from the problem of hypothermia.

Mr. Wilson

They are.

Mr. Donald Stewart (Western Isles)

That is right.

Mr. Major

I reject that charge absolutely. They would do well to recall, before they make it, that it was a Conservative Administration in 1979 that introduced automatic heating additions for the first time for older supplementary pensioner householders.

Mr. Wilson

It is not enough.

Mr. Major

If he thinks that that initial move was not enough, the hon. Gentleman may recall that subsequently we extended the number automatically entitled to heating additions so that as of today about 1·5 million supplementary pensioners over 65 get extra help with their heating of between £2·20 and £1–45 per week. When he makes remarks about help for cattle and not for people, he overlooks that substantial amount of assistance that was introduced, and is being given, by this Government. He might also bear in mind that nine out of every 10 supplementary pensioners now get heating additions, compared with only six or seven out of every 10 in 1978.

The hon. Gentleman also dealt with the exceptionally severe weather payments and some of the difficulties they cause. That payment is often confused with the cold climate allowance, but there is an important difference which may be understood in the House but not outside. Those payments are one-off payments to claimants in any part of the country if they have used more fuel than planned because of a period of exceptionally severe weather. The payments have always been a tiny part of the overall help with heating costs for the least well off.

The winter before last the chief adjudication officer, who advises local adjudication officers on the interpretation of the law, introduced a new system for determining when the regulation was satisfied. That system was based on temperature data provided by the Meteorological Office, collected from 17 weather stations throughout the country. The system was first fully tested earlier this year. As the hon. Gentleman will recall, there were some criticisms of the way in which it worked. I put that in the mildest form that is appropriate.

In the first place there were complaints from Scotland and from some parts of England and Wales where payments were not made. Secondly, the system was very complicated to understand. I recall that my hon. Friend the Minister for Social Security himself described it as a pretty weird and wonderful construction. Thirdly, the amount of help delivered under the system was relatively modest, about £10 on average. We now know that the administrative cost of the scheme was very high indeed in proportion to the help given. We estimate that last winter it cost over £1 million administratively to pay out £1·7 ​ million in benefit. Clearly that was not satisfactory. In view of the difficulties we undertook to review the provision.

In the meantime, the chief adjudication officer arranged for a test case to be heard by the social security commissioners to clarify whether his guidance properly reflected existing law. Their decision, which was issued recently, was that the system used last winter was not a satisfactory method for deciding claims. They held in effect that local adjudication officers should use their own judgement in deciding, on the facts of each individual case presented to them, whether there had been a period of exceptionally severe weather and how much extra the claimant had spent as a result.

The chief adjudication officer is now issuing new guidance to local adjudication officers in the light of the commissioners’ decision, so we shall no longer have the system of trigger points and degree day percentages which caused so much bewilderment last winter. None the less, local adjudication officers may still have to face substantial difficulty in determining whether exceptionally severe weather payments should be made. For example, they will have to decide whether the weather is exceptionally or abnormally severe. Interpretation of those terms is difficult. They will have to decide whether there has been a period of exceptionally severe weather, although there is no set definition of “period” and it may in theory be as little as a single day.
The local adjudication officers will also have to establish both what the claimants’ normal fuel expenditure is and how much extra is spent as a result.

Mr. Wilson

Is the Minister saying that in departing from the previous system of trigger points and so forth the temperature to be used as a criterion in each area will be a local one rather than a national one? In other words, will it still be possible for people in the south to get benefits under the severe weather scheme while people further north will not get them if their average temperature is much colder?

Mr. Major

I was about to make that point, though we shall have to wait for the guidance of the chief adjudication officer, which we shall have very shortly. There is a substantial probability that payments may still ‘vary between different parts of Britain in an unacceptable fashion. I stress that point because some hon. Members may have overlooked it. The commissioners, in their recent decision, held that the weather must be exceptional for the place in question.

A number of other factors will need to be considered, one of which is the commissioners’ ruling that “exceptionally severe” also means exceptional for the time of year. I have no wish to belittle the difficulties outlined by the hon. Member for Dundee, East, that high summer heating bills can cause. The issue is whether ad hoc, finely calculated payments towards specific bills are the best ‘way to help. I wonder if the social security budget and social security staff are best employed making adjustment for exceptionally rainy summers, exceptionally chilly springs, exceptionally misty autumns, and so on. Surely it is better to concentrate on delivering the correct level of weekly income efficiently to those in need.

We are therefore continuing to consider this provision very carefully in the light of the commissioners’ decision and the chief adjudication officer’s impending guidance. ​ We shall be looking at the effects of that guidance, both in terms of the way in which it seeks to provide extra help with fuel bills and its practical implications. In the meantime, the guidance is being issued so that staff will be able to handle any claims being made.

I hope —though my expectations are not high —that I may have persuaded the hon. Member for Dundee, East that the Government are anxious to help the least well off ​with their heating problems. The Government are genuinely concerned about the matter and, regardless of whether I have convinced the hon. Gentleman, we shall continue to offer substantial assistance, although it may not be in the ways that the hon. Gentleman suggested in his remarks today.