Government U-turns on winter fuel allowances
Keir Starmer plans to soften the government’s stance on winter fuel allowances in a major U-turn after restrictions on the payments sparked a backlash from pensioners.
During Prime Minister’s questions, the Prime Minister said the government wants to “ensure that as we go forward, more pensioners are eligible for winter fuel payments,” as part of a fiscal event.
Starmer said the government is holding off on sharing any details as “it is important that … we are clear that we can afford the decision we are making.”
Just hours earlier the chancellor, Rachel Reeves, was asked about a possible u-turn on the controversial policy, and she said “that policy stands as it was necessary to stabilise the public finances.”
The decision to restrict winter fuel payments to pensioners who qualify for income-related benefits would have blocked 9m people from claiming the allowance.
The government’s spending review is expected to arrive in June, ahead of the Autumn Budget later in the year.
Opposition figures demand explicit confirmation
When Conservative leader Kemi Badenoch asked the PM to commit to reversing the winter fuel payment cuts, Starmer did not confirm.
Starmer said walking back on the winter fuel payment cuts is only possible because Labour government policies are uplifting the economy.
“As the economy improves, we want to take measures that will impact on peoples lives, and therefore we will look at the threshold, but that will have to be part of a fiscal event,” said Starmer.
Lib Dem leader Ed Davey also demanded an explicit confirmation from Starmer that the winter fuel cuts will be reversed.
The PM responded that the trade deals the government has struck, particularly with the EU will help alleviate the cost of living crisis, and will make these measures more affordable.
“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 we are taking.
“And that’s why I want to make sure that more pensioners are eligible for winter fuel,” Starmer said.
Badenoch suggested that the U-turn is inevitable, as the Prime Minister is “desperate.” Badenoch has been criticised for potentially not noticing that the PM committed to walking back on winter fuel cuts, though her team insists she wanted explicit confirmation.
She then asked how the “348 MPs who went over the top and voted for the winter fuel cut last September,” as well as the public, will trust the PM.
There were discussions around a potential U-turn on winter fuel cuts earlier this month, as the unpopular policy saw Health Secretary Wes Streeting admitting that voters “aren’t happy” with the winter fuel allowance cuts, and polling backs this up, even with assurances they would save the Exchequer £1.4 billion.
Liberal Democrat Leader Ed Davey said: “The world’s longest u-turn continues.
“The Prime Minister has today announced the ‘concepts of a plan’ that have come far too late for the millions of pensioners forced to freeze in their own homes over the winter.
“The least those people deserve is an apology for this punitive policy and a serious proposal from the Prime Minister on how he will begin to pick up the pieces from his Government’s disastrous decision. Not vague words that will take months to materialise into something meaningful.”
Caroline Abrahams, Charity Director at Age UK said: “We welcome the PM’s comments and his commitment to change, but of course the devil is always in the detail.”
On the means-tested winter fuel payment reform, Abrahams said Age UK are “especially worried about the welfare of older people entitled to Pension Credit but not claiming it; those whose incomes were meagre but that took them just above the line; and others who are seriously unwell and whose heating bills are exceptionally high because they cannot allow themselves to get cold.”
Age UK estimate there are 2.5m that fall under these categories.
Jon Greer, head of retirement policy at wealth management firm, Quilter said: “While a full reversal seems unlikely, there is speculation that the income threshold could be raised from £11,500. That would allow more pensioners to qualify while retaining some element of means-testing.
“However, if pension credit is no longer used as the mechanism, the government will need to establish a new system to determine eligibility. It must be simple, effective, and avoid excluding those in genuine need through red tape or lack of awareness.”