Keir Starmer used his first major interview as Prime Minister over the weekend to declare that he was willing to be “unpopular”. In view of early opinion polling that might be just as well (Starmer’s net approval rating has fallen to -21).
Unpopular is certainly an accurate description of the planned cuts to winter fuel payments (introduced by Gordon Brown in 1997). Back in mid-August I revealed that ministers were opposed to Rachel Reeves’s decision, that lifelong Labour voters were abandoning the party, and that usually loyal backbenchers were furious (“as a standalone cut, it’s almost suicidal,” one told me). Matters have not improved since then.
The story is dominating the headlines – crowding out more popular government policies – and Labour faces a revolt when MPs vote on the policy tomorrow. Twelve Labour backbenchers have signed a motion against the decision and triple that number could rebel (mostly by abstaining).
A far larger group will vote with the government but have serious concerns over the policy. “There’s wide acknowledgement that Rachel has made a political mistake,” one MP told me (the Chancellor will get a chance to respond when she addresses the weekly Parliamentary Labour Party meeting at 6pm today).
Others, including some new MPs, are increasingly defensive of the measure. One said he had been “radicalised” by the fiscal Nimbyism of Conservatives who for years championed cuts to working-age benefits. Yet even loyalists believe the government has done a poor job of communicating the policy.
How did Labour end up here? The decision was first announced by Reeves in her statement on the government’s inheritance on 29 July. As George Osborne has noted, winter fuel payment cuts are routinely proposed by the Treasury to chancellors. Policy wonks have long argued that the universal benefit is poorly targeted (27 per cent of pensioners live in a millionaire household).
But Reeves set a notably low threshold for the cut: only those in receipt of pension credit – which guarantees a minimum income of £218.15 a week – will now receive the winter fuel allowance (currently worth £300 for the over-80s and £200 for younger pensioners). Ten million of the 11.4 million pensioners who at present claim the benefit will lose it, including 1.6 million below the poverty line. To apply for pension credit, there are 243 questions you must first answer.
Taking money away from one of the most politically engaged groups is hard at any time (“your average Rottweiler on speed can be a lot more amiable than a pensioner wronged,” quipped Tony Blair in his memoir). But it is even harder when energy bills will rise by 10 per cent to an average of £1,717 next month. Labour, after all, fought the election on a promise to cut bills by £300.
In his BBC interview, Starmer pointed out that the triple lock means the annual increase in the state pension “will outstrip any reduction in the winter fuel payment” (a fact some Labour MPs have longed to hear). Had Reeves made this clear in her statement – and set a more generous threshold – the backlash would have been more limited. But Labour is now racing to catch up with opponents who have set the terms of debate. “If you’re explaining, you’re losing,” remarks one rebel, quoting Ronald Reagan.
Ed Balls has argued on his podcast with Osborne that the government needs an “escape route”. But there is no suggestion from either No 10 or No 11 that they are looking for one. If anything, there is a renewed determination to see the policy through: it is viewed as emblematic of the government’s ability to take “tough decisions”.
The measure is not fiscally significant – it would save £1.5bn a year (just 0.1 per cent of annual government spending) – but it has attained a far greater political significance. Should Labour U-turn, insiders fear, it would be seen not only as unpopular but as weak. Internal and external rebellion against tough measures to come – in the Budget and in next March’s Spending Review – will have been incentivised. This government will be branded one that retreats at the sound of gunfire.
And yet. I would not be surprised if at or before the Budget on 30 October the government makes clear that poorer pensioners, most obviously those below the poverty line, will not lose money (whether through the introduction of a social tariff for energy or an alternative mechanism).
Regardless, Labour faces intense political pain over this issue. A coalition spanning the Conservatives, the Liberal Democrats, Reform, the Green Party and consumer champion Martin Lewis has assembled. As winter draws closer, the decision to remove a winter-related benefit will only become more salient. Reports of pensioners choosing between heating and eating or, worse, freezing to death will fill the papers.
There was a reason why Osborne never touched pensioner benefits (while imposing regressive but often popular cuts on working households). There was a reason why Blair and Brown never forgot the rage that the 75p increase in the state pension inspired. Starmer and Reeves might not be for turning – but they face one of the biggest tests of their careers.
[See also: Paul Nowak: “We need to see public-sector pay restored”]
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