Hundreds of thousands are still unclear if they will be able to switch the heating on when the weather turns cold
It is the first major U-turn of Sir Keir Starmer’s Government – and it will probably not be the last.
In another comms mess from No 10, officials could not explain if the fuel payment changes would be implemented in time for this winter or how poor a pensioner will need to be to qualify. That leaves hundreds of thousands of them unclear about how often they will be able to afford to turn the heating on when the colder weather turns.
The decision to means test the winter fuel allowance was one of the first announcements made by Starmer and his Chancellor, Rachel Reeves, almost a year ago, just three weeks into their new administration.
A standalone decision, proclaimed without the cover of a wider budget, the issue became totemic. The speedy decision was intended to demonstrate both the dire state of the Government’s economic inheritance and the new regime’s willingness to take tough decisions in response.
Instead, it snowballed into a policy described by Labour MPs as “Labour’s poll tax” and as Starmer’s “Thatcher, milk snatcher” policy. Early grumblings from MPs generally on the Labour left, alongside socialist unions including Unite, rapidly spread into more unexpected parts of the party.
By the spring, it had got worse. Bruising encounters on the doorstep in local elections and the Runcorn and Helsby by-election earlier this month led to those MPs who had made a decent fist of defending the policy change their minds. They now admitted that it was the most frequently raised issue by members of the public.
As The i Paper exclusively reported at the weekend, talks in No 10 about abandoning the policy accelerated last week. That is, after internal research indicated voters would not necessarily bear a grudge against the Government if it performed a partial or full U-turn. Until the last few days, senior members of the Government had resisted a change to the policy on fiscal grounds and because any U-turn would make Starmer look like he is flip-flopping, their thinking shifted. Focus groups instead showed that the policy is an obstacle to the Government landing any of their other key messages.
Simply put, it was a policy obstacle that had to be pushed to one side.
On Wednesday, Environment Secretary Steve Reed was sent out in the early morning to hold the line. No change.
But just before lunchtime, Starmer was on his feet in the House of Commons declaring a U-turn at Prime Minister’s Questions (PMQs). Given that No 10 may not have finalised the policy, you might have expected Starmer to delay an announcement until the Budget in the autumn, when the full details will be available.
Instead, he tried to spin it as a Treasury success story. Starmer linked the about-turn to a narrative about the economy gaining in strength.
“As the economy improves, we want to take measures that will impact on people’s lives and therefore we will look at the threshold, but that will have to be part of a fiscal event,” Starmer said.
Some sources had suggested that the changes could be announced at Reeves’ Spending Review next month. Former Labour PM Gordon Brown has said the Government shoud release the details of the changes to the winter fuel allowance “very quickly”.
(Photo: House of Commons/UK Parliament/PA Wire)
After PMQs at a briefing for reporters, No 10 officials were asked how international money markets could have confidence in the Government if it performed a U-turn whenever Labour suffers an electoral setback.
Starmer’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.”
Laughably, the Conservatives tried to claim the U-turn as a win, but Badenoch was not agile enough to spot the screeching change of gear, even as it happened in front of her in the House of Commons.
Starmer had been obvious in his response to Labour MP Sarah Owen, who had asked about winter fuel. But Badenoch at first ignored his reply completely and, in a later question, without referencing his earlier comments, asked again.
After Starmer repeated his answer, Badenoch could not apparently hear what Starmer was saying, describing him as “a man who can’t give a straight answer to a simple question”.
After a couple of successful recent outings at PMQs for Badenoch, it will worry the Tories if she is sliding backwards. She could have owned this U-turn, but didn’t.
Meanwhile, no one knows who will benefit from the partial shift in policy.
Last year, the Government announced that its £300 payment would apply only to pensioners who are also eligible for pension credit.
Government projections, released by Work and Pensions Secretary Liz Kendall in November, indicate that the policy could push 50,000 more pensioners into relative poverty, excluding housing costs, between 2024 and 2027.
She pointed out, however, that the projections failed to consider Government efforts to increase pension credit claims, which would affect winter fuel payment eligibility. February’s data reveals a 64 per cent surge in pension credit applications, with 117,800 approved since the winter fuel payment changes were announced, compared to the same period last year.
But the threshold is a hard cut-off: pensioners have to receive less than £173.75 a week. Even a pound over means they are ineligible for around £50 extra each week in Pension Credit, and they have had to manage without their Winter Fuel Payment.
It is those people on the margins of the cutoff who Starmer will try to help when he announces the changes at the “next fiscal event,” probably in October. But as yet, pensioners in this position do not know if they are eligible and will not for possibly another six months.
To scrap the scheme would cost £1.4bn, but it will not come to that. Some money will be found down the back of the sofa in the hundreds of millions to help those on the borderline of pension credit eligibility.
Yes, the winter fuel allowance decision was an albatross around Starmer’s neck. Yes, it needed to go. But without details of how much it will cost or exactly who will benefit, there will be further uncertainty standing in the way of their clear messaging, which was what drove this U-turn in the first place.
