Andy Haldane, the former chief economist at the Bank of England and current chief executive of the Royal Society for Arts, labelled cutting the winter fuel payment for pensioners as “bad politics and bad economics.”
Haldane criticised the policy, stating it contradicted the idea that those with the “broadest shoulders” should bear the burden. “I can’t see how a pensioner earning £14,000 fits that description,” he told LBC. “They are financially vulnerable, so it seemed like poor political strategy and likely poor economics too.”
The winter fuel payment, originally introduced by the Labour government, provided up to £300 annually to all retirees. However, Rachel Reeves has pledged to scrap the benefit as part of efforts to address a £22 billion shortfall in public finances.
Haldane acknowledged that means-testing benefits is a reasonable approach, especially for wealthier pensioners, but described the current move as a “failure of design rather than principle.” He suggested that redesigning the policy could have raised some funds without exacerbating the issue, remarking, “They’ve kept digging themselves into a hole.”
