Labour’s winter fuel revolt

Keir Starmer must forge a politics of generational solidarity. The crises the UK faces require collaboration, not conflict.

By New Statesman

It was a Labour government in 1997 that introduced the winter fuel allowance. “[We] are simply not prepared to allow another winter to go by when pensioners are fearful of turning up their heating, even on the coldest winter days,” declared chancellor Gordon Brown.

Over the decade that followed, Labour lifted more than a million pensioners out of poverty. Partly due to the propensity of older generations to vote, their security became a political priority. David Cameron’s coalition government introduced the “triple lock” on the state pension in 2010, ensuring that it rises by the rate of inflation, average earnings or 2.5 per cent (whichever is highest). Throughout the austerity years, universal benefits such as free bus passes and winter fuel payments were protected.

But confronted by what it calls a £22bn “black hole” in the public finances, Labour has departed from this consensus. In her statement on the government’s inheritance on 29 July, Rachel Reeves announced that the winter fuel benefit would now be means-tested in order to save £1.5bn a year. Only households in receipt of pension credit – which guarantees a minimum income of £218.15 a week – will now receive the lump payment (currently worth £300 for the over-80s and £200 for younger pensioners). “The scale of the situation we are dealing with means incredibly tough choices,” said Ms Reeves.

For the ten million pensioners who will now lose the winter fuel allowance, this policy will also mean tough choices. As Ofgem recently announced, the average annual energy bill will rise to £1,717 a year from October (up £149 since July). Owing to the price spike triggered by the war in Ukraine, bills have nearly doubled since 2021. But for pensioners who rely on well-heated homes for medical reasons, energy costs will be higher still.

Labour’s decision has already triggered the most significant political revolt since the party entered power in July. As we reported last week, MPs have received more letters on this issue than any other in recent years (including the war in Gaza). Almost 450,000 people have signed an Age UK petition against the move. Ministers have been assailed in public by lifelong Labour voters warning they will no longer vote for the party.

This is not mere special pleading. As Martin Lewis, the consumer champion, has noted: “Pension credit is a payment for those on an income of less than £12,600 – that’s very, very low.” He has persuasively argued that the government should instead offer support to those in the lowest four council tax bands, which are linked to property values. This would offer greater protection to those on low incomes (a solution that some Labour ministers privately favour).

There is a case for means-testing winter fuel payments – one in four British pensioners is now a millionaire – but the stereotype of affluent retirees is at odds with reality. Relative pensioner poverty rose from 13 per cent in 2011-12 to 16 per cent in 2022-23. Older households increasingly face punitive social care costs (Labour has abandoned plans to impose an £86,000 cap on payments). They also routinely use their accumulated wealth to subsidise younger generations: one in six grandparents will give an average of £71,942 over their lifetime.

For these reasons, Labour should be wary of the politics of generational warfare. Ms Reeves has rightly framed her decision as a purely fiscal one. Some in the party, however, take a degree of relish in targeting pensioners (only 20 per cent of over-70s voted Labour compared to 45 per cent for the Conservatives). Yet a government elected with a thin vote share of 33.7 per cent cannot afford to alienate any group. To achieve re-election, Labour should treat pensioners as potential converts, not traitors.

But more than this, Keir Starmer must forge a politics of generational solidarity. During the Brexit wars, activists on both sides stoked the narrative of young vs old. Yet the crises that the UK faces – across the NHS, social care, housing and education – require collaboration, not conflict. The repair of the public realm will force workers and pensioners alike to contribute more in taxation. But the vulnerable must be protected. In recognition of this, Labour should start by shielding those for whom a cruel winter lies ahead.

[See also: The Democratic opportunity]