Pensioners will be £1,700 better off, Rachel Reeves tells winter fuel rebels

Rachel Reeves says pensioners are on track for a £1,700 boost under Labour as she tries to fend off a revolt over the winter fuel payment cut.

In an article in The Telegraph on Monday, ahead of a crucial policy vote, the Chancellor of the Exchequer released estimates of the likely rise in the state pension over the next five years.

The Treasury is telling potential Labour rebels that the rise in the state pension thanks to the ‘triple lock’ is far greater than the impact of scrapping winter fuel payments for all pensioners.

But unrest among Labour MPs remains, with around 40 MPs reportedly considering rebelling, abstaining from voting on policy in the Commons or voting against it.

Unions have rallied behind the rebels to voice their concerns, with one union leader on Monday comparing Ms Reeves to the Grinch who stole Christmas.

10 million pensioners lose benefits

In July, Ms Reeves announced that the winter fuel allowance of up to £300 would no longer be provided to all pensioners.

Instead, it will be means-tested, and will only go to those who have a pension credit, meaning 10 million of the 11 million who received the payments will suffer.

The government has come under fire for cutting payments to pensioners while funding inflation-busting pay deals for civil servants, including train drivers and junior doctors.

Retirees are already preparing for the energy cut, with a new survey showing that half of them plan to heat their homes less this winter.

In her article, Ms Reeves emphasises that the decision to deprive the majority of pensioners of their payments was necessary to plug the £22bn spending gap left by the Tories when they came to power this year.

Meanwhile, a Labour government minister on Monday did not rule out scrapping free bus fares for all pensioners, fuelling speculation about cuts to the elderly.

Mrs Reeves writes: “The easiest thing I could have done in my first weeks in office was to duck the tough decisions and walk away. To do what the Conservatives have done time and time again: put short-term interests ahead of the national interest.”

She later adds: “These were not choices I wanted to make or expected to make, but they were the right choices to deliver on our promise of economic stability.

“And with that stability we can deliver a better off Britain. That’s what drives my policies and the decisions I make every day in government.

“That’s why we’re delivering on our election promise to protect the triple lock, so we can put more money into pensioners’ pockets every year. The Full New State Pension alone will be worth around £1,700 more by the time of the next election.”

No sign of a turnaround

Despite weeks of pressure from disgruntled Labour MPs and elderly charities, she has given no indication that the policy will be scrapped.

The £1,700 figure is a new estimate from the Treasury of how much a pensioner will benefit from the triple lock between now and 2029, when the next general election is held.

The triple lock guarantees that the state pension will rise each year by the higher of inflation, wage increases or 2.5 per cent. It was a Tory policy that Labour decided to maintain at the election.

The latest pay rise figure is due to be published on Tuesday, meaning pensioners will find out how much their state pension will rise next year, as it has currently emerged as the highest of the three measures. The rise is expected to be around £400.

A number of Labour MPs are concerned that the threshold for ending winter fuel payments has been set too low.

Only 5% register for pension credit

The Ministry of Finance has made every effort to register the 800,000 people who are eligible for pension credit but have not yet registered.

But new figures show that fewer than 5 percent of these people have applied in the five weeks since the cut was announced.

Older Britons earning just £13,000 and not eligible for pension credit will lose the benefit, with critics saying these people will have to choose between “heating and eating”.

New analysis by the Resolution Foundation, an influential Labour think tank, has found that 1.3 million pensioner households living in poverty will lose their benefits after housing costs are deducted.

Ms Reeves attempted to convince sceptics when she addressed Labour MPs behind closed doors on Monday evening.

She told the parliamentary Labour Party meeting: “There are tougher decisions to come. I don’t say that because I like it. I don’t, but it is a reflection of the legacy that we have. So when members look at where to apportion the blame, when pensioners look at where to apportion the blame, I will tell you where the blame lies. It lies with the Conservatives and the reckless decisions that they have made.”

Meanwhile, Sir Keir Starmer will tell the Trades Union Congress on Tuesday that pay rises that threaten economic stability cannot be implemented amid demands for above-inflation pay rises for all public sector workers.

Sir Keir will say: “I have to make it clear, from a position of respect, that this Government will not under any circumstances compromise its mandate for economic stability. And with difficult decisions ahead, the pay will inevitably be shaped by that.”

Mick Lynch, general secretary of the RMT rail union, called on Monday for the winter fuel restrictions to be reversed, saying: “The decision has to be with Rachel Reeves and Keir Starmer because that’s what I think it’s all about… to correct this mistake.

“Why do you want to be misled in the first budget by playing the Grinch at Christmas?”

Rishi Sunak, the outgoing leader of the Conservative Party, said: “Labour MPs know this is indefensible – they must do the right thing and force the government to be honest about the impact this severe cut will have.”


Tough decisions today will secure Britain’s long-term prosperity

By Rachel Reeves

The choices facing this new government were never going to be easy. We have inherited an economy that has barely grown in 14 years. The national debt has more than doubled since 2010. Our public services, like the NHS, are broken after 14 years of underfunding and lack of reform. And families are worse off because successive governments failed to prioritise stability and growth.

Those choices became even harder in the days after the general election, when the Treasury presented me with a £22 billion black hole

in the public finances left by the Conservative Party. That is also an excess of £22 billion this year.
Did the Conservatives disclose this to the government spending watchdog? No. Did they disclose it to parliament? No. And did they disclose it to the British people before the election? No. It is a damning indictment of the Conservatives’ record in power. First the party, then the country. They promised accountability, but oversaw it with unimaginable recklessness.
The easiest thing I could have done in my first weeks in office was to duck the tough decisions and walk away. To do what the Conservatives have done time and time again: put short-term interests above the national interest. Let extra borrowing go unchecked. Give up economic and financial stability.

I was – and am – not prepared to do that, because it is the British people who pay the price. This Labour government was elected on a clear mandate for change. That change can only come by fixing the foundations of our economy. That is why economic stability was the first step in our manifesto, because I know, as every family and business knows, that prosperity can only be built on the foundations of strong public finances.

To achieve that change, we will have to make tough decisions, like cancelling road projects that were not properly funded, reviewing the new hospital programme to create a realistic plan, and targeting winter fuel payments to those most in need. These were not choices I wanted to make or expected to make, but they were the right ones to deliver on our promise of economic stability. And with that stability, we can deliver a better off Britain. That is what drives my politics and the decisions I make every day in government. That is why we are delivering on our election promise to protect the triple lock, so that we can put more money into pensioners’ pockets every year. The full state pension alone will be worth around £1,700 more by the time of the next election.

That’s why we’ve guaranteed no increases in National Insurance Contributions, Income Tax rates or VAT, so we can protect family budgets. That’s why we’re fixing our broken planning system, so the next generation can realise the dream of home ownership. And that’s why we’re working with businesses, so we can invest with confidence and create the growth we need to fund our public services and reduce debt.

We have had to make difficult decisions – and there will be more. But just as Keir Starmer changed the Labour Party for the better, I know that we can change Britain for the better. We will rebuild the foundations, we will rebuild a better Britain. That is the change we were elected to make – and it is the change we will make.

Rachel Reeves is the Minister of Finance

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