How ‘concerned’ Labour MPs want to punish Rachel Reeves over winter fuel payment cuts

Rachel Reeves is under fire for cutting winter fuel payments. Bloomberg via Bloomberg via Getty Images

On May 1st, Keir Starmer He could not have been clearer about his position on whether all pensioners should continue to receive the government winter allowance.

The then Leader of the Opposition made it clear in the House of Commons that scrapping it was a very bad idea.

He was so concerned about the prospect of the Tories doing this that he asked Rishi Sunak bee PMQs that day: “Will the Prime Minister now rule out withholding pensioners’ winter fuel payments to fund his £46bn black hole?”

How much Prime Minister Starmer must now regret that particular line of attack.

Within days of taking office in government two months ago, Rachel Reeves decided to make the hitherto universal benefit income-tested, meaning that only people with a pension would continue to receive it. However, ten million pensioners would be excluded.

Reeves blamed the £22bn “black hole” in the country’s finances – which Labour claims it inherited from the Tories – on the need to find savings wherever possible to balance the books.

Still, it has created a major political problem for the new government, potentially leading to Starmer’s biggest grassroots revolt yet.

Under mounting pressure from MPs, party leader Lucy Powell announced that a parliamentary vote on the controversial cut will take place on Tuesday.

That is the same Lucy Powell who was sent on air last week to claim that there would have been a run on the pound and the economy would have collapsed if the Chancellor of the Exchequer had not made the decision she did.

Some in the government are appalled that Reeves has chosen to deprive millions of pensioners – many of whom earn just £11,500 a year – of £300 in the first major decision of her term.

A senior source told HuffPost UK: “I keep waiting for some sensible person to say ‘okay, how do we get out of the trough we’ve got into with these policies’, rather than for some reason turning it into a test of our political and economic credibility.”

Another insider said: “This is a problem at the front door, but they need to address it now.”

So far, 10 Labour MPs have signed a motion in the House of Commons calling on the Treasury to reconsider. But some senior party officials believe another 20 could rebel.

That would easily defeat the seven rebels who defied the prime minister and voted to abolish the cap on two-child benefits just two weeks after the general election, only to be sacked by the Labour party for their trouble.

HuffPost UK has learned there are currently no plans to impose the same sanction on MPs who vote against the government on Tuesday.

Among the signatories to the rebel motion tabled by Labour MP Neil Duncan-Jordan is former shadow cabinet member Rachael Maskell. Speaking to HuffPost UK, she said she and her Labour colleagues were “deeply concerned” by the government’s approach.

“I have spoken to so many MPs who are really upset about these measures,” she said. “Some are literally in tears at the prospect of their elderly constituents not receiving their winter fuel payments.

“I’ve read letters myself and I was in tears. A recently widowed voter told me that they’re just above the income threshold, so they’re no longer eligible for benefits, and they’re really scared of the winter. This isn’t about macroeconomics, this is about real lives.”

The Ministry of Finance has launched a campaign to encourage the 800,000 pensioners who are eligible for pension credit but are not using it to do so.

But Maskell said that even if you fill out the lengthy application form, it takes nine weeks to process the claim.

“To keep old people warm and healthy, they need to have enough money to pay the bills and that has to be the focus now,” she said. “We’ve said we’re going to protect the NHS, so we don’t need any more old people in hospital beds this winter.

“Older people cannot retain heat, which puts them at greater risk of stroke, heart attack and hypothermia. That would put more demand on the NHS, and it will [health secretary] Wes Straating who will have to appear before the country and explain why – and I don’t want him to have to do that.”

The York Central MP wants the Chancellor to delay her plans to cut the winter allowance until next year and use the time to put in place a better system to target the allowance to those who need it.

Caroline Abrahams, chief executive of the charity Age UK, said: “Many older people are very anxious about how they will survive this winter” if benefits are cut.

The charity estimates that around a million elderly people living on the poverty line but not poor enough to receive pension credit will face “real hardship” this winter as a result of the Chancellor’s decision.

Abrahams said: “The Government does not deny that millions of pensioners on low and modest incomes will lose their winter fuel payments under their plans and they have no credible answer to the question of the plight of all those whose small company pensions take them above the pension threshold.

“It is for these reasons that they should pause this policy so that it can be fully considered as part of the government spending review in the spring.”

Downing Street sources have told HuffPost UK the government has no plans to change the rebels’ minds or make concessions ahead of Tuesday’s election.

They pointed to the extra £421m announced last week for the Household Support Fund and the fact that pensions are ‘triple locked’, meaning the state pension rises by £400 every year, as evidence that the government is taking action to help people on the lowest incomes.

A minister defended the government’s position, insisting that the Chancellor had in fact chosen the least bad option.

“We know it’s hard, but we see how bad the government finances are,” they told HuffPost UK.It was very clear that there would be a major economic shock to the markets if we did not take immediate action on this.

“The choice the Ministry of Finance had was to maintain the triple lock of the pension or to test the winter fuel surcharge against the means. That makes it a fairly easy choice.

“The politics are tough, but we have to show voters that we have this terrible legacy and that is the real difficulty we have. There are no palatable choices here.

“We are asking the public and pensioners to give us some time to clean up this mess.”

Still, Tuesday’s vote promises to be extremely uncomfortable for Starmer and Reeves.

And with a brutal budget due at the end of October, it looks set to be the prime minister making good on his promise that “things will get worse before they get better”.

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