Starmer indicates partial U-turn over winter fuel payments squeeze

Sir Keir Starmer has signalled a partial U-turn over the Government’s decision to strip winter fuel payments from millions of pensioners.

The Prime Minister said that “as the economy improves” he wanted to look at widening eligibility for the payments worth up to £300.

But officials were unable to say how many more pensioners would be eligible or if the policy would be altered in time for this winter.

The decision to means-test the previously universal payment was one of the first announcements by Chancellor Rachel Reeves after Labour’s landslide election victory last year and has been widely blamed for the party’s collapse in support.

It was an issue which Labour campaigners were challenged about on the doorsteps during May’s elections which saw the party lose councillors and the Runcorn and Helsby parliamentary by-election.

The Government insisted the policy was necessary to help stabilise the public finances, allowing the improvements in the economic picture which Sir Keir said could result in the partial reversal of the measure.

He said he understood the financial pressures on pensioners as he made the announcement at Prime Minister’s Questions.

“I recognise that people are still feeling the pressure of the cost-of-living crisis, including pensioners,” Sir Keir told the Commons.

“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.”

He said the Government will “only make decisions we can afford” and will therefore look at this as part of a “fiscal event” – indicating a change will not be announced before the Chancellor’s autumn budget.

Conservative Party leader Kemi Badenoch challenged Sir Keir in the Commons, calling him “desperate” and asking how the public could trust him again.

She later said it was a “joke” for Sir Keir to say he was reacting to an improving economy after figures showed inflation in April rocketed to its highest level in more than a year.

She said she would like to see pensioners on £11,000 to £15,000 a year getting winter fuel payments and that it will be “too late” if Sir Keir waits until the autumn budget to set out the details.

“If he’s waiting until the budget it means that people are going to lose their winter fuel payment for another year,” she said.

The Conservatives would not support tax rises to fund extending winter fuel payments, she said.

Liberal Democrat leader Sir Ed Davey pressed Sir Keir to reverse his cuts to the winter fuel payment in full.

The policy shift came just hours after Ms Reeves and Environment Secretary Steve Reed were both forced to defend the decision to means-test the payment during media interviews on Wednesday morning.

Ms Reeves said: “I do recognise the challenges that people face, but that policy stands because it was necessary to stabilise the public finances.”

An ally of the Chancellor said she and the Prime Minister were “united” behind the commitment to increase the number of pensioners receiving the payment.

Finding a mechanism to widen eligibility for the payment will cause headaches in Whitehall after the decision to link it to the pension credit threshold.

Officials fear that simply increasing the pension credit threshold would increase take-up of that benefit, wiping out any potential savings.

The Prime Minister’s official spokesman was unable to give details about how Sir Keir would deliver on his promise or how many pensioners would benefit.

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 rather than Labour’s electoral difficulties.

Asked how markets could have confidence in the Government if it performed a U-turn whenever Labour suffered an electoral setback, the Prime Minister’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.”

Veteran Labour left-winger Diane Abbott earlier told ITV’s Good Morning Britain the policy was like the poll tax in the way it had “cut through” to voters.

She said: “One of the things that struck me, colleagues that went to campaign in Runcorn, that was the issue that was raised on every doorstep. Some things cut through, remember Mrs Thatcher and the poll tax … I think the winter fuel is like that because everybody knows an old person.”

Asked if she thought Sir Keir would still be Prime Minister at the time of the next election, she said “I hope so” but “there are other people”, singling out Deputy Prime Minister Angela Rayner.

A memo leaked to The Daily Telegraph suggests Ms Rayner pushed for a radical combination of tax hikes to avoid the need for further cuts in spending.

She suggested reinstating the pensions lifetime allowance and changing dividend taxes in a memo to the Chancellor ahead of March’s spring statement with ideas to raise revenue.

Sir Keir defended his deputy during PMQs after Mrs Badenoch said his Cabinet was in “open warfare” with Ms Rayner “clearly calling the shots”.

Age UK’s charity director Caroline Abrahams welcomed the Prime Minister’s commitment to change the winter fuel policy but said “the devil is always in the detail and we postpone judgment until we hear more”.

Last winter saw “very significant numbers of older people too frightened to turn on their heating when it was cold”, she said, adding “if nothing changes, next winter threatens to be just as bad”.

Welsh First Minister Baroness Eluned Morgan said she wanted “significantly” more pensioners to get the cash.

“The cuts to the Winter Fuel Payment caused real concern to people across Wales. We are yet to hear the details of the announcement, but I’m hopeful that significantly more people will now benefit from the payment.”