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UK ministers are drawing up plans for a partial U-turn over the controversial winter fuel payment cut after the policy was widely blamed for Labour’s reversals in this month’s local elections, according to senior government figures.
Conversations are taking place at a high level over how to alleviate the impact of the policy — announced last summer — which has removed up to £300 in winter payments from 10 million pensioners, including some on low incomes.
That policy has been nicknamed “Labour’s poll tax” by one party veteran while scores of MPs have expressed fears that it is eroding support among many former Labour voters.
On Friday the government sought to dismiss a report in the i Paper that changes to the winter fuel policy could come “as soon as next month” — or in the autumn Budget — after focus groups indicated they would support ministers changing the policy.
The i Paper said the government was considering whether to increase the £11,500 income threshold over which pensioners are no longer eligible for the allowance. A government official said: “The policy stands.”
But two Whitehall officials told the Financial Times that conversations had been taking place on the best way to soften the policy and limit its political impact.
Sir Keir Starmer, talking after a European summit in Albania, did not deny that a change was being considered but insisted: “We took difficult decisions, but the right decisions, at the Budget, including the decision that we took on winter fuel.
“They were taken specifically with the purpose of stabilising the economy. And I think we’re seeing the evidence of that in the interest rate cuts and the growth figures.”
Rachel Reeves, chancellor, announced in July last year that the winter fuel allowance — which is between £100 and £300 — would be restricted to those on pension credit and other income-related benefits in a policy designed to save £1.4bn.
She said the surprise move was part of a broader attempt to tackle a £22bn “black hole” in the nation’s finances left by the previous Tory government.
Labour campaigners said the issue came up repeatedly in the local elections on May 1 in which the party lost the by-election in Runcorn & Helsby to Reform UK and elsewhere lost two-thirds of the council seats it was defending. Reform UK, Nigel Farage’s populist party, has pledged to reverse the policy.
Senior figures to have criticised the policy include Eluned Morgan, the Labour first minister of Wales.
David Rees, a Labour member of the Welsh Senedd, told the FT that Starmer’s decision to cut the winter fuel payment, as well as its wider disability cuts, had contributed to plummeting support for Labour in Wales.
“People wanted change and they haven’t seen that happen . . . they’ve seen decisions which in their minds have hurt people,” he said. “Everyone agrees that millionaires shouldn’t get it [winter fuel payments]. What people disagree with is the level of the cut-off.”
“There are challenges sometimes about what Westminster does, which might work for parts of England and other parts of the UK, but might be worse for Wales. Our job is to say no, that doesn’t work for us,” he said.
The winter fuel policy is separate from another controversial package of welfare reforms, which is likely to prompt a rebellion by up to 50 Labour MPs in the House of Commons concerned about the impact of changes to benefits including personal independence payments.
