Latest news with #winterFuelPayments
The Independent
a day ago
- Business
- The Independent
Labour MPs call for benefit cuts to be scrapped after winter fuel payment U-turn
Labour backbenchers are urging the Government to reconsider planned disability benefit cuts following the restoration of winter fuel payments to the majority of pensioners by Rachel Reeves. The chancellor's £1.25 billion initiative, revealed on Monday, will provide automatic payments of up to £300 to pensioners with an income below £35,000 annually. This decision reverses last year's removal of the universal scheme for pensioners, which was reinstated for those claiming specific benefits like pension credit. Nadia Whittome, Labour MP for Nottingham East, cautioned ministers against repeating a "similar mistake" by tightening eligibility criteria for Personal Independence Payments (PIP). Richard Burgon, MP for Leeds East, implored pensions minister Torsten Bell to heed the concerns of backbenchers, offering their assistance to help the Government 'get it right.' In her warning, Ms Whittome said she was not asking Mr Bell 'to keep the status quo or not to support people into work' and added: 'I'm simply asking him not to cut disabled people's benefits.' The pensions minister, who works in both the Treasury and Department for Work and Pensions, replied that the numbers of people receiving PIP is set to 'continue to grow every single year in the years ahead, after the changes set out by this Government'. In its Pathways to Work green paper, the Government proposed a new eligibility requirement, so PIP claimants must score a minimum of four points on one daily living activity, such as preparing food, washing and bathing, using the toilet or reading, to receive the daily living element of the benefit. 'This means that people who only score the lowest points on each of the PIP daily living activities will lose their entitlement in future,' the document noted. Mr Burgon told the Commons: 'As a Labour MP who voted against the winter fuel payment cuts, I very much welcome this change in position, but can I urge the minister and the Government to learn the lessons of this and one of the lessons is, listen to backbenchers? 'If the minister and the Government listen to backbenchers, that can help the Government get it right, help the Government avoid getting it wrong, and so what we don't want is to be here in a year or two's time with a minister sent to the despatch box after not listening to backbenchers on disability benefit cuts, making another U-turn again.' Mr Bell replied that it was 'important to listen to backbenchers, to frontbenchers'. Opposition MPs cheered when the minister added: 'It's even important to listen to members opposite on occasion.' Liberal Democrat MP Mike Martin warned that 'judging by the questions from his own backbenchers, it seems that we're going to have further U-turns on PIP and on the two-child benefit cap'. The Tunbridge Wells MP asked Mr Bell: 'To save his colleagues anguish, will he let us know now when those U-turns are coming?' The minister replied: 'What Labour MPs want to see is a Labour Government bringing down child poverty, and that's what we're going to do 'What Labour MPs want to see is a Government that can take the responsible decisions, including difficult ones on tax and on means testing the winter fuel payment so that we can invest in public services and turn around the disgrace that has become Britain's public realm for far too long.' Conservative former work and pensions secretary Esther McVey had earlier asked whether the Chancellor, 'now that she and the Government have got a taste for climbdowns', would 'reverse the equally ridiculous national insurance contribution (Nic) rises, which is destroying jobs, and the inheritance tax changes, which is destroying farms and family businesses'. Mr Bell said: 'This is a party opposite that has learned no lessons whatsoever, that thinks it can come to this chamber, call for more spending, oppose every tax rise and expect to ever be taken seriously again – they will not.' Labour MP Rebecca Long-Bailey pressed the Government to make changes to the two-child benefit cap, which means most parents cannot claim for more than two children. 'It's the right thing to do to lift pensioners out of poverty, and I'm sure that both he and the Chancellor also agree that it's right to lift children out of poverty,' the Salford MP told the Commons. 'So can he reassure this House that he and the Chancellor are doing all they can to outline plans to lift the two-child cap on universal credit as soon as possible?' Mr Bell replied: 'All levers to reduce child poverty are on the table. 'The child poverty strategy will be published in the autumn.' He added: 'If we look at who is struggling most, having to turn off their heating, it is actually younger families with children that are struggling with that. 'So she's absolutely right to raise this issue, it is one of the core purposes of this Government, we cannot carry on with a situation where large families, huge percentages of them, are in poverty.'
The Independent
a day ago
- Business
- The Independent
Labour MPs in call for benefits U-turn after change to winter fuel payment cut
Labour backbenchers have called for a Government U-turn on planned disability benefit cuts, after Chancellor Rachel Reeves restored winter fuel payments to a majority of pensioners. Ms Reeves' £1.25 billion plan unveiled on Monday will see automatic payments worth up to £300 given to pensioners with an income less than £35,000 a year. It followed last year's decision to strip pensioners of the previously universal scheme, unless they claimed certain benefits, such as pension credit. Nadia Whittome, the Labour MP for Nottingham East, warned ministers they risked making a 'similar mistake' if they tighten the eligibility criteria for personal independence payments, known as Pip. Leeds East MP Richard Burgon called on pensions minister Torsten Bell to 'listen now' so that backbenchers can help the Government 'get it right'. In her warning, Ms Whittome said she was not asking Mr Bell 'to keep the status quo or not to support people into work' and added: 'I'm simply asking him not to cut disabled people's benefits.' The pensions minister, who works in both the Treasury and Department for Work and Pensions, replied that the numbers of people receiving Pip is set to 'continue to grow every single year in the years ahead, after the changes set out by this Government'. In its Pathways to Work green paper, the Government proposed a new eligibility requirement, so Pip claimants must score a minimum of four points on one daily living activity, such as preparing food, washing and bathing, using the toilet or reading, to receive the daily living element of the benefit. 'This means that people who only score the lowest points on each of the Pip daily living activities will lose their entitlement in future,' the document noted. Mr Burgon told the Commons: 'As a Labour MP who voted against the winter fuel payment cuts, I very much welcome this change in position, but can I urge the minister and the Government to learn the lessons of this and one of the lessons is, listen to backbenchers? 'If the minister and the Government listen to backbenchers, that can help the Government get it right, help the Government avoid getting it wrong, and so what we don't want is to be here in a year or two's time with a minister sent to the despatch box after not listening to backbenchers on disability benefit cuts, making another U-turn again.' Mr Bell replied that it was 'important to listen to backbenchers, to frontbenchers'. Opposition MPs cheered when the minister added: 'It's even important to listen to members opposite on occasion.' Liberal Democrat MP Mike Martin warned that 'judging by the questions from his own backbenchers, it seems that we're going to have further U-turns on Pip and on the two-child benefit cap'. The Tunbridge Wells MP asked Mr Bell: 'To save his colleagues anguish, will he let us know now when those U-turns are coming?' The minister replied: 'What Labour MPs want to see is a Labour Government bringing down child poverty, and that's what we're going to do 'What Labour MPs want to see is a Government that can take the responsible decisions, including difficult ones on tax and on means testing the winter fuel payment so that we can invest in public services and turn around the disgrace that has become Britain's public realm for far too long.' Conservative former work and pensions secretary Esther McVey had earlier asked whether the Chancellor, 'now that she and the Government have got a taste for climbdowns', would 'reverse the equally ridiculous national insurance contribution (Nic) rises, which is destroying jobs, and the inheritance tax changes, which is destroying farms and family businesses'. Mr Bell said: 'This is a party opposite that has learned no lessons whatsoever, that thinks it can come to this chamber, call for more spending, oppose every tax rise and expect to ever be taken seriously again – they will not.' Labour MP Rebecca Long-Bailey pressed the Government to make changes to the two-child benefit cap, which means most parents cannot claim for more than two children. 'It's the right thing to do to lift pensioners out of poverty, and I'm sure that both he and the Chancellor also agree that it's right to lift children out of poverty,' the Salford MP told the Commons. 'So can he reassure this House that he and the Chancellor are doing all they can to outline plans to lift the two-child cap on universal credit as soon as possible?' Mr Bell replied: 'All levers to reduce child poverty are on the table. 'The child poverty strategy will be published in the autumn.' He added: 'If we look at who is struggling most, having to turn off their heating, it is actually younger families with children that are struggling with that. 'So she's absolutely right to raise this issue, it is one of the core purposes of this Government, we cannot carry on with a situation where large families, huge percentages of them, are in poverty.'
Telegraph
26-05-2025
- Business
- Telegraph
Starmer's benefits U-turn to blow £5bn hole in budget
Sir Keir Starmer risks blowing a £5bn black hole in the public finances after U-turning on benefit cuts in the face of a backbench rebellion. The Prime Minister will cost the Treasury as much as £1.5bn by bringing back winter fuel payments for most pensioners, while up to £3.5bn more will be lost if he axes the two-child benefit cap. A planned reduction in net migration could cost the Treasury £7bn more, according to Britain's fiscal watchdog. It comes as Rachel Reeves, the Chancellor, braces for another bleak set of forecasts amid speculation she will be forced to raise taxes in her autumn Budget. Left-wing Labour MPs are clamouring for the Government to loosen the purse strings, with whips seeking to head off a potentially major rebellion. Meanwhile Nigel Farage, the Reform leader, will this week attempt to outflank Labour on welfare by calling for winter fuel payments to be restored for all and the two-child benefit cap to go in full. Angela Rayner, the Left-wing Deputy Prime Minister who called for tax rises in a leaked memo revealed by this newspaper, put on a show of support in TV interviews on Sunday. Ms Rayner insisted she 'never' wanted to become prime minister and rejected speculation that the document was leaked to further her leadership ambitions. The Deputy Prime Minister added that she was '100pc' behind Ms Reeves, and said she could not do a better job as prime minister than Sir Keir. In her first public comments since the memo emerged, Ms Rayner said: 'I have no desire to go for the leadership of the Labour Party. My desire is to deliver for the people of this country who have given me opportunities beyond what I could have dreamed of.' She also confirmed a formal leak inquiry is now underway to ascertain how The Telegraph was able to reveal the document, which outlined eight proposed tax increases and two benefit cuts. Winter fuel payments Sir Keir announced last week that more pensioners would get winter fuel payments, which are between £200 and £300, than his Government had originally planned. There is a growing expectation in Whitehall that the specifics of that new position will come in the weeks ahead rather than at the autumn Budget, as Sir Keir first indicated. The Treasury is planning to restore the payments, which had been stripped from nearly 10m pensioners last summer, to almost everyone in retirement except the very wealthy. The money could then be removed from only the most well-off pensioners by clawing it back when they file a tax return, allowing Labour to still claim millionaires will not get the payments. The changes are likely to mean far smaller savings for the Treasury than the £1.5bn that the measure was initially expected to raise. If the payment was stripped only from the million pensioners who are in the 45pc additional income tax rate bracket, for example, it would generate between £200m and £300m. Two-child benefit cap Additional pressure on the finances would come from scrapping the two-child benefit cap, which applies to Universal Credit. Sir Keir initially kept the Tory policy when taking office, but The Observer reported this weekend that the Prime Minister wanted to remove it. Whitehall insiders cautioned that it has not yet been decided what – if anything – might replace the current limit. Announcements on any changes to the cap are expected to come around the Budget, with the poverty strategy delayed from summer until then when the financial situation is clearer. Getting rid of the two-child benefit cap entirely would cost £3.5bn. The possibility of the Treasury losing up to £5bn in annual revenue if both policies are abandoned in full would increase the need for new tax rises, spending cuts or looser borrowing rules. Ms Reeves is already facing a difficult set of decisions with current economic forecasts suggesting she is in growing danger of breaking her fiscal rules. Further factors Other factors will shape how much money the Chancellor has to play with in her autumn Budget. Home Office proposals to reduce net migration by 100,000 a year could have a knock-on impact on the Chancellor's headroom, with estimates suggesting an annual rise in borrowing of £7bn by the end of the decade. Last week's announcement on above-inflation pay rises for the public sector could add drive spending up by £2bn to £3bn each year, creating additional pressures. But new trade deals with America, India and the European Union are expected by the government to boost trade, which could bring much-needed additional tax revenue. Treasury officials are also understood to be pressing the Office for Budget Responsibility (OBR), the Government's official independent forecaster, to accept that the Labour Government's housebuilding drive will boost economic growth more than previously expected. The most unpredictable factor could well be the decisions on trade protectionism taken by Donald Trump, the US President, which have knock-on impacts on UK economic forecasts. Mel Stride, the shadow Tory chancellor, told The Telegraph: 'Labour have already lost control of the public finances and abandoned any pretence of fiscal responsibility. 'Now they are looking at loading up billions more in welfare spending, paid for either by higher taxes for working families or through yet more borrowing. 'When added to the likely cost of their panicked climbdown on Winter Fuel Payments, the Chancellor faces a potential £5bn black hole. 'Rachel Reeves's credibility is having new holes torn in it by the day. She is the 'tin foil' Chancellor, too weak to withstand pressure including from her own colleagues. 'We've already had fantasy economics from Reform – it appears Labour are following suit.' A No 10 insider insisted that no final decisions have been taken on the new winter fuel payment position or the future of the two-child benefit cap.
Yahoo
26-05-2025
- Business
- Yahoo
Starmer's benefits U-turn to blow £5bn hole in budget
Sir Keir Starmer risks blowing a £5bn black hole in the public finances after U-turning on benefit cuts in the face of a backbench rebellion. The Prime Minister will cost the Treasury as much as £1.5bn by bringing back winter fuel payments for most pensioners, while up to £3.5bn more will be lost if he axes the two-child benefit cap. A planned reduction in net migration could cost the Treasury £7bn more, according to Britain's fiscal watchdog. It comes as Rachel Reeves, the Chancellor, braces for another bleak set of forecasts amid speculation she will be forced to raise taxes in her autumn Budget. Left-wing Labour MPs are clamouring for the Government to loosen the purse strings, with whips seeking to head off a potentially major rebellion. Meanwhile Nigel Farage, the Reform leader, will this week attempt to outflank Labour on welfare by calling for winter fuel payments to be restored for all and the two-child benefit cap to go in full. Angela Rayner, the Left-wing Deputy Prime Minister who called for tax rises in a leaked memo revealed by this newspaper, put on a show of support in TV interviews on Sunday. Ms Rayner insisted she 'never' wanted to become prime minister and rejected speculation that the document was leaked to further her leadership ambitions. The Deputy Prime Minister added that she was '100pc' behind Ms Reeves, and said she could not do a better job as prime minister than Sir Keir. In her first public comments since the memo emerged, Ms Rayner said: 'I have no desire to go for the leadership of the Labour Party. My desire is to deliver for the people of this country who have given me opportunities beyond what I could have dreamed of.' She also confirmed a formal leak inquiry is now underway to ascertain how The Telegraph was able to reveal the document, which outlined eight proposed tax increases and two benefit cuts. Sir Keir announced last week that more pensioners would get winter fuel payments, which are between £200 and £300, than his Government had originally planned. There is a growing expectation in Whitehall that the specifics of that new position will come in the weeks ahead rather than at the autumn Budget, as Sir Keir first indicated. The Treasury is planning to restore the payments, which had been stripped from nearly 10m pensioners last summer, to almost everyone in retirement except the very wealthy. The money could then be removed from only the most well-off pensioners by clawing it back when they file a tax return, allowing Labour to still claim millionaires will not get the payments. The changes are likely to mean far smaller savings for the Treasury than the £1.5bn that the measure was initially expected to raise. If the payment was stripped only from the million pensioners who are in the 45pc additional income tax rate bracket, for example, it would generate between £200m and £300m. Additional pressure on the finances would come from scrapping the two-child benefit cap, which applies to Universal Credit. Sir Keir initially kept the Tory policy when taking office, but The Observer reported this weekend that the Prime Minister wanted to remove it. Whitehall insiders cautioned that it has not yet been decided what – if anything – might replace the current limit. Announcements on any changes to the cap are expected to come around the Budget, with the poverty strategy delayed from summer until then when the financial situation is clearer. Getting rid of the two-child benefit cap entirely would cost £3.5bn. The possibility of the Treasury losing up to £5bn in annual revenue if both policies are abandoned in full would increase the need for new tax rises, spending cuts or looser borrowing rules. Ms Reeves is already facing a difficult set of decisions with current economic forecasts suggesting she is in growing danger of breaking her fiscal rules. Other factors will shape how much money the Chancellor has to play with in her autumn Budget. Home Office proposals to reduce net migration by 100,000 a year could have a knock-on impact on the Chancellor's headroom, with estimates suggesting an annual rise in borrowing of £7bn by the end of the decade. Last week's announcement on above-inflation pay rises for the public sector could add drive spending up by £2bn to £3bn each year, creating additional pressures. But new trade deals with America, India and the European Union are expected by the government to boost trade, which could bring much-needed additional tax revenue. Treasury officials are also understood to be pressing the Office for Budget Responsibility (OBR), the Government's official independent forecaster, to accept that the Labour Government's housebuilding drive will boost economic growth more than previously expected. The most unpredictable factor could well be the decisions on trade protectionism taken by Donald Trump, the US President, which have knock-on impacts on UK economic forecasts. Mel Stride, the shadow Tory chancellor, told The Telegraph: 'Labour have already lost control of the public finances and abandoned any pretence of fiscal responsibility. 'Now they are looking at loading up billions more in welfare spending, paid for either by higher taxes for working families or through yet more borrowing. 'When added to the likely cost of their panicked climbdown on Winter Fuel Payments, the Chancellor faces a potential £5bn black hole. 'Rachel Reeves's credibility is having new holes torn in it by the day. She is the 'tin foil' Chancellor, too weak to withstand pressure including from her own colleagues. 'We've already had fantasy economics from Reform – it appears Labour are following suit.' A No 10 insider insisted that no final decisions have been taken on the new winter fuel payment position or the future of the two-child benefit cap.
Yahoo
24-05-2025
- Business
- Yahoo
PM could lift controversial benefit cap in budget - as Farage makes two big election promises
Sir Keir Starmer could decide to lift the two-child benefit cap in the autumn budget, amid further pressure from Nigel Farage to appeal to traditional Labour voters. The Reform leader will use a speech this week to commit his party to scrapping the two-child cap, as well as reinstating winter fuel payments in full. The prime minister - who took Westminster by surprise at PMQs by revealing his intention to row back on the winter fuel cut - has previously said he would like to lift the two-child cap if the government could afford it. There are now mounting suggestions an easing of the controversial benefit restriction may be unveiled when the chancellor delivers the budget later this year. According to The Observer, Sir Keir told cabinet ministers he wanted to axe the measure - and asked the Treasury to look for ways to fund the move. It comes after the government delayed the release of its child poverty strategy, which is expected to recommend the divisive cap - introduced by former Tory chancellor George Osborne - is scrapped. Ministers have already said any changes to winter fuel payments, triggered by mounting political pressure, would only be made when the government's next fiscal event rolls round. The Financial Times reported it may be done by restoring the benefit to all pensioners, with the cash needed being clawed back from the wealthy through the tax system. The payment was taken from more than 10 million pensioners this winter after it became means-tested, and its unpopularity was a big factor in Labour's battering at recent elections. Before Wednesday's PMQs, the prime minister and chancellor had insisted there would be no U-turn. More from Sky News: Many Labour MPs have called for the government to do more to help the poorest in society, amid mounting concern over the impact of wider benefit reforms. Former prime minister Gordon Brown this week told Sky News the two-child cap was "pretty discriminatory" and could be scrapped by raising money through a tax on the gambling industry. Mr Farage, who believes Reform UK can win the next election, will this week accuse Sir Keir of being "out of touch with working people". In a speech first reported by The Sunday Telegraph, he is expected to say: "It's going to be these very same working people that will vote Reform at the next election and kick Labour out of government."
