Starmer's winter fuel cut U-turn claim 'not credible'

Sky News

23-05-2025

Sir Keir Starmer's claim he is U-turning on cutting winter fuel payments for pensioners because he now has the money is not "credible", Harriet Harman has said.
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The Labour peer, speaking to Sky News political editor Beth Rigby on the Electoral Dysfunction podcast, said the prime minister made the move as it was so unpopular with voters.
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She also said Labour's poor results at the local elections and the Runcorn and Helsby by-election were the "straw that broke the camel's back".
Sir Keir said on Wednesday he would ease the cut to the winter fuel payment, which has been removed from more than 10 million pensioners this winter after it became means-tested.
He and his ministers had insisted they would stick to their guns on the policy, even just hours before Sir Keir revealed his change of heart at PMQs
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Baroness Harman said: "It's always been contested and always been unpopular.
"But the final straw that broke the camel's back was the elections. The council elections and the Runcorn by-election, where the voters were saying, 'this is not the change we voted for'.
"At the end of the day, you cannot just keep flying in the face of what voters - particularly if they're people who previously voted for you - wanted."
Baroness Harman is unconvinced by Sir Keir's claim he can U-turn because there is more money due to good economic management by the government.
"I don't think that's credible as an argument," she said.
"It really is the fact that voters just said 'this is not the change we voted for, we're not going to have this'."
The challenge for the government now, she said, is deciding who will get the allowance moving forward, when they'll get it, and when it will all be announced.
What are the options for winter fuel payments?
The Institute for Fiscal Studies has looked into the government's options after Sir Keir Starmer said he is considering changes to the cut to winter fuel payment (WFP).
The government could make a complete U-turn on removing the payment from pensioners not claiming pension credit so they all receive it again.
There could be a higher eligibility threshold. Households not claiming pension credit could apply directly for the winter fuel payment, reporting their income and other circumstances.
Or, all pensioner households could claim it but those above a certain income level could do a self-assessment tax return to pay some of it back as a higher income tax charge. This could be like child benefit, where the repayment is based on the higher income member of the household.
Instead of reducing pension credit by £1 for every £1 of income, it could be withdrawn more slowly to entitle more households to it, and therefore WFP.
At the moment, WFP is paid to households but if it was paid to individuals the government could means-test each pensioner, rather than their household. This could be based on an individual's income, which the government already records for tax purposes. Individuals who have a low income could get the payment, even if their spouse is high income. This would mean low income couples getting twice as much, whereas each eligible house currently gets the same.
Instead of just those receiving pension credit getting WFP, the government could extend it to pensioners who claim means-tested welfare for housing or council tax support. A total of 430,000 renting households would be eligible at a cost of about £100m a year.
Pensioners not on pension credit but receiving disability credits could get WFP, extending eligibility to 1.8m households in England and Scotland at a cost of about £500m a year.
Pensioners living in a band A-C property could be automatically entitled to WFP, affected just over half (6.3m).
Chancellor Rachel Reeves has committed to just one major fiscal event a year, meaning just one annual budget in the autumn.
Autumn budgets normally take place in October, with the last one at the end of the month.
If this year's budget is around the same date, it will leave little time for the extra winter fuel payments to be made, as they are paid between November and December.
Business Secretary Jonathan Reynolds told the Electoral Dysfunction podcast the economy will have to be "strong enough" for the government to U-turn on winter fuel payment cuts.
He also said the public would have to wait for the budget for any announcement.