Humiliated Starmer forced into winter fuel allowance U-turn: More pensioners WILL be eligible for payments after Labour revolt
Keir Starmer dramatically announced a climbdown on winter fuel allowance today as he struggles to revive Labour‘s fortunes.
Taking PMQs, Sir Keir defended the decision to strip nine million older people of the payments soon after taking power.
But he said ‘as the economy improves’ the government will lower the threshold for receiving the cash – worth up to £300.
He suggested the detail will only be announced at ‘a future fiscal event’ – with the next one the Autumn Budget. That typically happens in November or even December, raising doubts about whether the shift will happen for this winter.
Labour MPs immediately broke cover to demand ministers go further by reversing the cuts altogether.
Meanwhile, Sir Keir dodged on whether taxes might have to rise again to fund the volte face, after it emerged Angela Rayner has been pushing for more hikes on savers and the wealthy.
Only those on pensioner credit are still entitled to winter fuel, with the measure partly blamed for the disastrous crash in the government’s popularity.
A poll today showed Reform eight points ahead of Labour in the wake of their local elections surge.
Taking PMQs, Keir Starmer defended the decision to strip nine million older people of the payments soon after taking power
Before the winter fuel cuts more than 11million pensioners were receiving winter fuel allowance
Sir Keir has been facing the threat of a revolt over the winter fuel policy, as well as curbs to working age benefits.
There has been growing speculation that the leadership is looking for a way out, potentially by scaling back the cuts.
But it is thought there are practical difficulties with lowering the threshold for receiving winter fuel allowance, with IT systems struggling to differentiate between income levels.
The premier had been teed up for his change in position by a question from Labour MP Sarah Owen.
‘Whilst the economy is showing signs of improving, many pensioners are still impacted by the cost-of-living crisis,’ she asked.
‘People in Luton who have worked hard all their lives seeing their precious savings slip away, so can the Prime Minister tell us what measures he will take to help struggling pensions in towns like mine?’
Sir Keir replied: ‘I recognise that people are still feeling the pressure of the cost-of-living crisis including pensioners. As the economy improves, we want to make sure people feel those improvements in their days as their lives go forward. That is why we want to ensure that as we go forward more pensioners are eligible for winter fuel payments.
‘As you would expect Mr Speaker, we will only make decisions we can afford, that is why we will look at that as part of a fiscal event.’
MPs urged Sir Keir to go even further and reverse the winter fuel allowance cuts altogether
Rachel Reeves has been dropping heavy hints about movement on winter fuel
Kemi Badenoch swiped that the U-turn had been ‘inevitable’ and branded Sir Keir ‘desperate’.
‘What will he say to the 348 MPs who went over the top and voted for the winter fuel cut last September. Just like the British public, how can any of them ever trust him again?’ she said.
Asked by Lib Dem leader Ed Davey whether he was reversing the policy ‘in full’, Sir Keir replied: ‘The economy is beginning to improve, people are still feeling the pressure, that’s why we’re taking the measures that we are, that’s why we’re striking the trade deals that we are striking.
‘As that improves I do want people to feel the benefit of the measures that we’re taking and that is why I want to ensure that more pensioners are eligible for winter fuel. It is important that, as you’d expect, that we are clear we can afford the decisions we’re making and that’s why it’ll now be looked at at a fiscal event.’
Downing Street was unable to say how many more pensioners would receive winter fuel payments or whether the reforms would be in place this winter.
The PM’s official spokesman said Sir Keir wanted the changes to be introduced ‘as quickly as possible’.
The changes will only be set out at a ‘fiscal event’ – with Rachel Reeves’ autumn budget the first such opportunity unless the Government breaks with its schedule.
Asked if the changes would be in place this coming winter, the spokesman said: ‘We obviously want to deliver this as quickly as possible, but the Prime Minister was very clear in the House that this has to be done in an affordable way, in a funded way, and that’s why those decisions will be taken at a future fiscal event.’
Officials insisted the pledge to change course was based on the Government’s stewardship of the economy and the public finances.
Asked how markets could have confidence in the Government if it performed a U-turn whenever Labour suffered an electoral setback, Sir Keir’s press secretary said: ‘We will only make decisions when we can say where the money is coming from, how we’re going to pay for it and that it’s affordable. And that’s what you’ve heard from the Prime Minister today.’
Rachel Reeves has been dropping heavy hints about movement on winter fuel.
Speaking on the BBC’s Newscast earlier this week, the Chancellor said she would ‘continue to listen to understand the concerns that people have raised’.
‘I do understand the concerns that people have,’ she said.
She added: ‘We are a government that listens.
‘But we would always need to show where the money is going to come from if we’re going to make any policy changes. That would be part of the normal process.’
Leaked proposals from Ms Rayner revealed she has been pushing to increase the burden on Brits further instead of trimming spending and benefits.
The memo – sent by the Deputy PM’s office to Rachel Reeves before the Spring Statement – suggested eight different tax rises that would raise billions of pounds in revenue.
Although the Chancellor ignored the lobbying at that stage, she is struggling to find a way of balancing the books as the economy stalls ahead of the Spending Review and Autumn Budget.
The details, first obtained by the Telegraph, suggest serious tensions at the heart of the government over its approach – although insiders argued that such papers can be drawn up without ministerial sign-off.
The measures floated by Ms Rayner included reinstating the pensions lifetime allowance, changes to dividend taxes, a raid on a million people who pay additional rate income tax and a higher corporation tax level for banks.
