The Government could face a backbench rebellion over plans to scale back who is eligible for the winter fuel allowance for pensioners.
The move has been met with unease among some Labour backbenchers
Sir Keir Starmer said he recognised that scaling back the winter fuel payment was a “really tough decision” but said Labour must “secure the foundations” of the economy as he faces a potential backbench revolt over the plans.
The Prime Minister has faced criticism from unions and some Labour MPs over the policy, which will see all but the country’s poorest pensioners stripped of the winter fuel payment.
The move has been met with unease among some Labour backbenchers who have said they feel unable to vote with the Government on Tuesday.
Sir Keir told Scottish lobby journalists in Downing Street: “Let me first recognise this a really tough decision that we’ve had to make.”
I absolutely recognise the tough decisionSir Keir Starmer
But he said that Labour had been “elected into government on the basis of economic stability, that we would secure the foundations”.
Chancellor Rachel Reeves announced the squeeze in July as part of a series of measures aimed at filling what she called a £22 billion “black hole” in the public finances.
Sir Keir said: “If you’re asking whether I recognise it’s a tough decision I absolutely recognise the tough decision. If you’re asking, would I want to make this decision, the answer is no, but I did not want to inherit a £22 billion black hole, and I’m not prepared to walk past that.”
Some 17 Labour MPs have now signed a motion put forward by Neil Duncan-Jordan calling on the Government to delay implementing the cut.
The motion has also been backed by six of the seven MPs who lost the party whip in July after voting against the King’s Speech over the Government’s refusal to abolish the two-child benefit cap.
Sir Keir told the BBC at the weekend that whether or not Labour MPs will be suspended from the party for voting against cuts to winter fuel payments is “a matter for the chief whip”.
Chancellor Rachel Reeves announced the squeeze in July (PA)
PA Wire
A Number 10 spokeswoman said there was no dissent among ministers over the planned cut in a Cabinet meeting on Monday.
And a spokesperson for the Chancellor said that MPs showed “strong support” for the planned cut during a meeting of the parliamentary party on Monday evening.
Ms Reeves urged Labour MPs to back the move during that meeting, saying: “We stand, we lead and we govern together.”
She added: “I’m not immune to the arguments that many in this room have made. We considered those when the decision was made.”
Under the plans, the winter fuel allowance for pensioners will be limited to only those claiming pension credit or other means-tested benefits.
It is expected to reduce the number of pensioners in receipt of the up to £300 payment by 10 million, from 11.4 million to 1.5 million – most of whom claim pension credit – saving around £1.4 billion this year.
Unite union general secretary Sharon Graham has accused Labour of deciding to “pick the pocket of pensioners” and called instead for a wealth tax to raise funds.
The Prime Minister said that measures to stabilise the economy are “the foundation for the triple lock, which in the end means that the state pension will increase in a way that outstrips the winter fuel payment”.
The Chancellor wrote in The Telegraph on Monday that the Treasury estimates maintaining the triple lock will make a state pension worth around £1,700 more by 2029.
The triple lock guarantees the state pension will rise each year by the highest of either inflation, wage increases or 2.5%.
Robert Peston
Monday 9 September 2024
Peston's Politics
Governments get into a mess when pragmatic decisions that go wrong become tests of authority and principle. This is the tragi-comic fate of the Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer following their decision to abolish universal pensioner entitlement to the winter fuel payment.
The chancellor announced the controversial welfare saving to prove to investors that she is serious about improving the health of the public finances.
Her logic was that if she was having kittens about the £22 billion current year “black hole” that she says the Tory government bequeathed her - and my goodness she doesn’t tire of telling us how anxious she is - so too would be the City of London and investors.
That is why she engaged in a “lite” version of Osborne’s 2010 austerity. And her advisers and colleagues keep telling me she was only doing what Treasury officials told her was essential to prevent a fall in the price of government debt and an associated rise in market interest rates.
This justification however is laughable, as I normally tell them. And I mean that literally. Because when I talk to City investors controlling gazillions, they snort and giggle at the idea they would have turned against the self-defined iron chancellor if she hadn’t taken £1.4 billion from pensioners.
Reeves defends move to cut winter fuel payments as 'right decision'
The point is that tens of billions of pounds will be needed to fix UK public services, and that £1.4 billion is smaller than a rounding error.
The idea that Reeves’s fiscal credibility - which is high in any case - would be made or broken by the pensioner raid is absurd.
Even on the basis that it is an inefficient use of public money, because rich pensioners don’t need it, she could have waited till her October budget before deciding whether to means test the energy subsidy - and she could have announced the change in a strategic fashion along with assorted tax rises and spending re-allocations.
If her Treasury officials told her otherwise, as her political colleagues insist they did, then its market intelligence is rubbish and it is not the institution it once was.
As it happens, Treasury sources tell me Reeves’s defining characteristic is she is more old-school, small “c” conservative Treasury than they are, and that the pensioner squeeze was all her.
Either way, the argument is no longer about market economics, if it ever truly was.
It is now about competence and who is in charge.
If Starmer and Reeves are bullied into a u-turn by left wing MPs, the Tory press and trade union leaders, despite their enormous commons majority, then there would be a question about their ability to do what Starmer calls “tough, unpopular” things.
So early in his term, that would be a problem.
This is why, in their every utterance, they now talk about taking cash from pensioners as the very bedrock of their big ambitions to restore confidence in the UK and generate world-leading economic growth.
The point is that a gambit that was never at inception necessary to keep the confidence of investors has now acquired market significance: investors would look more warily at UK government debt and sterling, if Starmer and Reeves cave when the political heat is turned up, however ill-conceived the initial policy.
Not one Labour MP spoke out against winter fuel allowance cut at tonight’s PLP meeting
Private meeting to allow MPs to speak their mind sees silence on issue of freezing to death 4,000+ pensioners
On Monday night, Keir Starmer and Rachel Reeves held a private meeting with the ‘parliamentary Labour party’ (PLP) in the Commons, a gathering of all Labour’s MPs to allow them to voice their concerns and intentions ahead of tomorrow’s Commons vote on the Starmer-Reeves plan to cut the Winter Fuel Allowance for millions of pensioners, forcing many to choose between heating and eating, or quite possibly to do neither.
Not one MP present spoke against the plan, according to one attendee.
The cut, according to Labour’s own calculations, will kill around 4,000 pensioners each winter – especially women, northerners and the over-75s – on top of the 8,000 people who already die because they live in a cold home.
Not one MP.
Those who care about starving children are no longer in the party, having been suspended because they refused to back Starmer’s decision to continue the ‘two-child benefit cap’ that puts well over a million children either into poverty or even deeper into poverty – a decision that earned him the deserved epithet of ‘Sir Kid Starver’. Chancellor Rachel Reeves’s enthusiasm for depriving pensioners of heat has made her ‘Rachel Freeze’ – and has not prevented her claiming thousands for the energy bills of her parliamentary second home.
Red Tories surrounded by more red Tories, every bit as wicked and cruel as the blue kind.
Liberal Democrats to oppose winter fuel allowance cuts
Winter Fuel Allowance: Over half of pensioners say they will heat their homes less this winter
- Over half (55%) of UK pensioners polled say they will likely heat their homes less this winter due to the withdrawal of the Winter Fuel Payment, while four in ten (39%) say they will cut back on essentials.
- Two-thirds (65%) say they will take cost-cutting measures due to the government’s announcement to withdraw the Winter Fuel Payment support. One in five (19%) say they will eat less this winter.
- Liberal Democrats call on the Labour government to urgently rethink cuts that will affect around 11 million people and pledge to vote against the cut in Parliament.
A new poll commissioned by the Liberal Democrats has revealed the staggering effects of the cut to the Winter Fuel Allowance this winter.
The poll of pensioners showed that three in four (75%) expect to be affected by the Government’s cut to winter fuel allowance payments.
Staggeringly, over half (55%) of UK pensioners polled said they would likely be heating their homes less this winter, while 4 in 10 will look to cut back on other ‘essentials’.
1 in 5 (19%) pensioners are planning to eat less this winter due to the cut.
Research from the charity Age UK shows the proposed cut to Winter Fuel Payments will mean two million will find paying their energy bills a real stretch and will be seriously hit by this cut.
The poll comes as there is set to be a vote in Parliament on the cut to the Winter Fuel Allowance. Liberal Democrats initially called for a vote by tabling a motion and will now take the opportunity to oppose the government.
Commenting, Liberal Democrat Leader Ed Davey MP said:
The government should do the right thing and change course on this.
This decision to cut the Winter Fuel Allowance will put untold stress on pensioners, with many facing a heartbreaking choice between heating and eating this winter.
While we understand the dire state the Conservatives left the public finances in, now is not the time to be cutting support to some of the most vulnerable people in our society.
We cannot stand by and allow millions of pensioners to endure another winter in a cost of living crisis, Liberal Democrats will be voting against the government’s cut.