No guarantee over universal winter fuel payments

The Scottish government cannot guarantee it will be able to provide universal winter fuel payments to pensioners after the chancellor announced cuts south of the border, Public Finance Minister Ivan McKee has said.

He told BBC Radio's Good Morning Scotland the SNP government would “very much like” to provide universal cover but said ministers needed to “look at the numbers very, very closely”.

Asked if the benefit would have to be means tested, Mr McKee said: "Who knows?"

He added that ministers would have to make a "quick decision" ahead of winter.

In England and Wales, those not on pension credit or other means-tested benefits will no longer get the annual payments, worth between £100 and £300.

Scottish Secretary Ian Murray said the UK Labour government was facing a £22bn hole in the public finances due to overspend from the previous Conservative administration, but denied ministers were imposing austerity.

Responsibility for the winter fuel payment is set to be transferred to the Scottish government in September and replaced with a Holyrood-managed equivalent - the Pension Age Winter Heating Payment (PAWHP).

The Scottish government had estimated that one million Scots pensioners who were eligible for the UK payment would receive the PAWHP of between £100 and £300.

Ministers had said the benefit would be non-means tested, with universal entitlement based on reaching state pension age.

It is separate from the winter heating payment, which helps people on low income benefits who might have extra heating needs.

The Scottish government had said it needed about £180m to fund the PAWHP in 2024-25.

But Mr McKee said the chancellor's announcement suggested that funding from Westminster would be cut to about £80m.

"We think there will be at least £100m coming out of that, that we’d need to find from somewhere else if we want to continue to pay that winter fuel payment, which we absolutely want to do," he said.

The Poverty and Inequality Commission, a non-departmental public body that advises the Scottish government, has described the PAWHP as "extraordinarily poorly targeted as regards to addressing poverty" that would result in "inefficient spend".

It noted that while some households with older adults are in fuel poverty, overall poverty amongst pensioners is lower than for some other household types.

The commission made several suggestions, including targeting the PAWHP at those on pension credit.

Age UK has described the introduction of means tests as a “disastrous outcome”. It said more than a third of UK pensioners entitled to pension credit do not receive it, meaning they would be excluded from the winter fuel payment.

Mr McKee told BBC Scotland News: “There’s a significant number of older people who do not qualify under the UK government’s rules for this going forward, but they should do and they are still in fuel poverty.”

He said introducing means tests made the process more complicated and “defeats the purpose” of them.

The SNP minister also accused the Labour government of imposing austerity despite assurances from Mr Murray and Scottish Labour leader Anas Sarwar that it would not.

Mr Sarwar told BBC Scotland's Debate Night Leader's Special last month: “Read my lips: no austerity under Labour.”

On the £22bn shortfall, Mr McKee said: “Labour should have known about this, they’ve either been incompetent in not checking the numbers that were readily available during the election campaign or they’re being very misleading about the process that has happened here.”

The SNP minister added that the Scottish government would now have "some difficult decisions to make".

He also said it was “really concerning” that the Scottish government was told about the cuts 90 minutes before the chancellor's announcement.

Mr McKee added Labour’s “grand talk” about resetting devolution “clearly” had not happened.

But Mr Murray said it was "completely and utterly wrong" to suggest Labour politicians knew public spending cuts would be needed prior to the election.

“This is a £22bn in-year overspend by the previous government that they hid from the Office for Budget Responsibility, which is the independent body which measures these things."

He predicted that the Scottish government would receive a “positive balance” in UK government funding through Barnett consequentials as a result of an increase in public sector pay south of the border.

Pressed on the promises that the UK government would not use austerity measures, he said: "There's no wholesale cuts here."

He added: “There is no austerity here.”

Mr Murray said the Scottish government had not been given more advance notice of the announcement due to “market sensitivities” in the chancellor's statement. He said Holyrood ministers had been told before anyone else.

Scottish Conservative MSP Miles Briggs said it was not true to say the financial problems had been left by the previous Tory administration.

He told Good Morning Scotland: "This seems to now be a politicisation of the Office of Budget Responsibility by the Labour Party. I don't think that's good for anybody."

Mr Briggs suggested the UK government would introduce tax rises in its budget announcement on 30 October.

"That was something they weren't willing to say before the election," he said.

The Scottish Greens called on Mr Sarwar to apologise for "misleading" the public about Labour's spending plans.

Co-leader Lorna Slater said: “Scottish Labour promised change and an end to Tory cuts and austerity, but that has fallen apart within weeks of them taking office."