Latest news with #winterfuelpayment
The Independent
11 hours ago
- Business
- The Independent
How could winter fuel payments change after government U-turn?
In a latest U-turn after months of backlash, Sir Keir Starmer 's government has announced that more pensioners will receive the winter fuel allowance this winter. Rachel Reeves confirmed a change on the controversial cuts would be in place in time for this winter, but said the government would not set out details of exactly how the payment will be restored until the autumn Budget. There remains confusion over who will be affected by the changes, when they will be introduced and what they will entail, but pensions minister Torsten Bell has said that the payment would not be reinstated for everyone. What was the winter fuel payment cut? The winter fuel payment is a state benefit previously given to all pensioners to help with energy costs during the coldest months of the year. The decision to means-test the previously universal payment was one of the first announcements by Rachel Reeves when she became chancellor after Labour's landslide election victory last year, and it has been widely blamed for the party's collapse in support. The government has insisted the policy was necessary to help stabilise the public finances, and meant that the payment would only go to those on low incomes who received specified benefits such as pension credit. This meant the number of pensioners receiving the payment was reduced by around 10 million, from 11.4 million to 1.5 million. Several charities, MPs and unions criticised the decision, with several blaming it for the party's disappointing local election results. In November, it was revealed that the government's own figures indicated it would force 100,000 pensioners into poverty in 2026. How was the payment linked to pension credit? Only those who claim pension credit were able to receive the winter fuel payment in winter 2024. Those who are above state pension age and have an income of less than £218.15 a week, or less than £332.95 as a joint weekly income with your partner, are eligible for pension credit. However, despite the government's campaigns and an increase in claims after the July 2024 announcement, it is estimated that half a million eligible people fail to claim the benefit. How could the new system work? Speaking to the work and pensions committee, Mr Bell said: 'Directly on your question of is there any prospect of a universal winter fuel payment, the answer is no, the principle I think most people, 95 per cent of people, agree, that it's not a good idea that we have a system paying a few hundreds of pounds to millionaires, and so we're not going to be continuing with that. 'But we will be looking at making more pensioners eligible.' According to The Times, the threshold could be based on the average level of real household disposable income - currently around £37,000. Reports have also said that payments could be restored to all pensioners, before requiring better-off claimants to pay it back through tax bills over the course of the next financial year. The plans would resemble George Osborne's high income child benefit charge, which sees 1 per cent of total child benefit received taxed for every £100 earned over £60,000. It means that, over whatever threshold Ms Reeves sets for the payments, an amount will be clawed back from those on higher incomes. It would mean only those in the bottom half of average incomes will keep the payments, with the top half of earners forced to repay the grant through higher tax bills over the course of the year. The plans could cost around £700 million, with the chancellor vowing to set out her plans to pay for the change at her autumn Budget. Critics said it would be an 'administrative nightmare', however.
Bloomberg
21 hours ago
- Business
- Bloomberg
Winter Fuel Payment to Be Restored by Winter, UK's Reeves Says
More lower income UK pensioners will receive winter fuel payments this year as Chancellor of the Exchequer Rachel Reeves works to restore the heating subsidy to some of those who were stripped of it last year in a £1.8 billion ($2.4 billion) spending cut. 'People should be in no doubt that the means test will increase and more people will get a winter fuel payment this winter,' Reeves told reporters in Rochdale on Wednesday after delivering a speech about regional transport spending. 'We'll set out the funding, we'll set out how everything will be paid for, in the budget in the autumn.'
The Guardian
a day ago
- Business
- The Guardian
Bereaved families of dead pensioners could be pursued over winter fuel payments
Bereaved families of tens of thousands of dead pensioners could be pursued by tax officials to recoup winter fuel payments under a new system being explored by the Treasury, the Guardian has learned. Rachel Reeves, the chancellor, confirmed on Wednesday that more pensioners will get winter fuel payments reinstated this year after weeks of uncertainty over the government's decision to make a U-turn on scrapping the benefit. Ministers are looking at restoring the payments as a universal benefit and then recouping the money when high-income pensioners fill in their tax returns, as creating a new means test would be a highly complex option. However, government insiders are concerned about a time lag of at least six months between the payment of up to £300 being made and it then being clawed back. It is feared that thousands could have died in that time, leaving grieving families to pick up the bill. One source said: 'We should never have scrapped the winter fuel payment in the first place, but the whole process of reinstating it has been completely chaotic. The optics of us demanding the money back from grieving families are dire.' The chancellor has brought forward confirmation of the change to the £11,500 income threshold over which pensioners are no longer eligible for the benefit to next week's spending review from the autumn budget, after a backlash against one of the most unpopular policies of the Labour government. In a further attempt to win public support and quell Labour backbench concerns, ministers are announcing on Thursday that all pupils in England whose families claim universal credit will be eligible for free school meals under an expansion of the scheme. Hundreds of thousands more children across the country will be able to access means-tested free school meals when the provision is extended from September 2026, after campaigners and school leavers urged ministers to take action on child poverty amid fears of delays. Reeves has already launched a charm offensive to persuade fractious Labour MPs that her spending review will not be a return to austerity, announcing £15bn for trams, trains and buses outside London as part of a £113bn investment in capital projects over the rest of the parliament. The chancellor wants capital spending to be at the centre of the government's narrative at the review next week in an acknowledgment that MPs, many of them in marginal seats, need a better economic story to address rising discontent among the public. Nearly 2.1 million pupils – almost one in four of the total in England – were eligible for free school meals in January 2024. The Department for Education has said more than half a million more children are expected to benefit from the expansion, with nearly £500 put back into parents' pockets every year. It suggested that the expansion will lift 100,000 children across England completely out of poverty, with the move being the most effective way of tackling the issue outside the benefits system. Keir Starmer has said the government will look at scrapping the two-child benefits limit. 'It is the moral mission of this government to tackle the stain of child poverty, and today this government takes a giant step towards ending it with targeted support that puts money back in parents' pockets,' the education secretary, Bridget Phillipson, said. The expansion of free school meals was almost universally welcomed by anti-poverty campaigners and teaching unions. Nick Harrison, chief executive of the Sutton Trust, said: 'This is a significant step towards taking hunger out of the classroom. 'Children can't learn effectively when hungry, so this announcement not only helps to tackle the effects of child poverty, but will also likely help improve education outcomes for disadvantaged young people.' Kate Anstey, at the Child Poverty Action Group charity, said: 'This is fantastic news and a gamechanger for children and families. At last, more kids will get the food they need to learn and thrive and millions of parents struggling to make ends meet will get a bit of breathing space.' Asked about the winter fuel payment after a speech in Rochdale, Reeves told reporters: 'We have listened to the concerns that people had about the level of the means test, and so we will be making changes to that; they will be in place so that pensioners are paid this coming winter. 'We'll announce the detail of that and the level of that as soon as we possibly can. But people should be in no doubt that the means test will increase and more people will get a winter fuel payment this winter.' The option of paying all pensioners a winter fuel payment and then asking for wealthier people to repay the money is a similar approach to that taken by the former Conservative chancellor George Osborne when he reduced child benefit eligibility for better-off parents. A senior official at HMRC, Jonathan Athow, confirmed to the Treasury select committee on Wednesday that if the tax system was used to make the changes, it would not be possible until next year. 'We'd have to get to April next year before we knew somebody's income, before we could then make any decisions about how [recouping the payment] would then be implemented,' he told MPs. The government's reversal came despite Downing Street denying that it would make changes to winter fuel payments after the Guardian revealed that it was rethinking the cut amid anxiety at the top of government that the policy could wreak serious electoral damage. The chancellor also hinted at tensions between cabinet colleagues saying she had had to turn down spending requests as she struggled to balance the books. 'Not every department will get everything that they want next week,' she said, 'and I have had to say no to things that I want to do too.' Just two Whitehall departments are still to agree their multi-year budgets with the Treasury before the spending review, the Guardian understands, with the home secretary, Yvette Cooper and the housing secretary, Angela Rayner, holding out on policing and social housing budgets. She also ruled out bending her fiscal rules, as some Labour MPs have urged her to do, and which she acknowledged would be the subject of much discussion over the coming days. It means that tax rises or further spending cuts are more likely this autumn.
Times
a day ago
- Business
- Times
PMQs live: Keir Starmer defends winter fuel U-turn
Like the chancellor today, the prime minister refused to say what he would do about the two-child benefit cap. Responding to a question from Kemi Badenoch, Sir Keir Starmer echoed Rachel Reeves in saying he is 'determined we will drive down child poverty'. He spoke of the task force on the matter and said the government's strategy will be set out 'in due course'. At prime minister's questions, Kemi Badenoch accused the chancellor of 'rushing' her plans on winter fuel payments because she 'just realised when winter is'. The Conservative leader said the winter fuel payment had been 'set in stone' three weeks ago, then the prime minister U-turned two weeks ago before the chancellor's comments today on the level of means testing for the payment being increased for this winter. She asked how many of the 10 million people who lost payments will get them back. Starmer said that his government had 'stabilised the economy' and would look at eligibility for the payments and how to pay for it. The Liberal Democrats have called for the chancellor to apologise to pensioners over the government's winter fuel payment reversal. Daisy Cooper, the Lib Dem MP and Treasury spokeswoman, said: 'This whole debacle has caused needless misery for millions of pensioners. 'We will look at the details of the changes at the spending review next week. In the meantime the chancellor should apologise to all those pensioners who had to freeze this winter because of this senseless policy.' The pensions minister has claimed the winter fuel payment changes last winter did not have adverse health impacts on pensioners. Asked what excess deaths were predicted, Torsten Bell told the work and pensions committee: 'First of all, we saw negative excess deaths, so fewer deaths than normal. That's obviously due to a wide range of factors. 'But if we look at the cohorts particularly affected by changes in the winter fuel payments, we see no differential effects on their health outcomes over the course of last winter. That's obviously partly because there's lots of wider support.' Bell pointed to the extension of the household support fund, raising the state pension above inflation and plans for a warm homes programme. 'We do want to help more pensioners in future,' he said. The chancellor's announcement of funding for northern transport projects has been welcomed by regional leaders and unions. Steve Rotheram, the Liverpool City Region mayor, said: 'This is a massive vote of confidence in our region and shows what's possible when national and local government pull in the same direction. 'It's not just about better connections — good transport is an engine of growth. It helps people get to work, supports new homes and businesses and builds the foundations of a fairer, more productive economy.' The Aslef union said: 'Aslef welcomes investment towards a fully integrated public transport system across Great Britain. We await the chancellor's announcements for heavy rail in the spending review next week.' By Oliver Wright, Policy Editor For Britain's steel industry it is not so much the level of American tariffs that hurt — it is the uncertainty. Ever since Sir Keir Starmer and President Trump 'signed' their much-vaunted trade deal last month their US clients have been waiting for the agreement to come into effect. New orders have completely dried up as US purchasers of British steel and aluminum products wait to buy their goods 'tariff-free', rather than at the 25 per cent rate currently imposed. • Read in full: Britain may have signed trade deal far from being delivered Rachel Reeves is 'scrambling to salvage her failing economic plan' after her reversal on the winter fuel payments, the Conservative Party has said. After the chancellor's speech, Gareth Davies, shadow Treasury minister, said: 'Rachel Reeves is scrambling to salvage her failing economic plan after the prime minister has made U-turn after U-turn, punching holes in her credibility. 'She needed to do better than copying and pasting announcements made by the previous Conservative government. 'Britain deserves better. Only the Conservatives believe in sound money, low tax and the ingenuity of our entrepreneurs.' The spending review will have 'more than £300 billion' additional spending over this parliament than the Conservative government planned, the chancellor said. Rachel Reeves said: 'The previous government made a lot of commitments. What they didn't do is put the money in to be able to deliver them. That is the big difference about what we are doing. 'I will be setting out in a spending review where you can see every pound allocated, investment for three years for day-to-day spending, investment for five years for capital spending. 'We will then be publishing a ten-year national infrastructure plan. That is a world away.' Further transport spending announcements would be made at the spending review, she said, as well as commitments on energy, digital infrastructure and housing. Rachel Reeves insisted she would set out how to pay for any increase in the threshold for winter fuel allowance at the next budget. Asked whether she would tell the public if she planned to fund her commitments by raising taxes or cutting spending on other departments, the chancellor said: 'As we have been clear, on winter fuel we will set out how we will fund that at the next fiscal event. 'We will set out how everything will be paid for at the budget in the autumn but it's important that everything that we do is funded, because that's how people know that we can afford it.' The chancellor dodged a question on the two-child benefit cap, saying she would not make unfunded spending commitments. Reeves said the cap was 'inherited' from the previous government and would cost more than £3 billion to reverse. 'I won't make spending commitments without explaining where money will come from,' she said. However, she insisted that the government was 'determined to reduce child poverty' and that it is a 'moral mission'. Work has already started with breakfast clubs and more money in childcare, she said, adding that the child poverty task force will report in the autumn before the government sets out further plans. By Chris Smyth Winter fuel payments will be restored this winter but wealthier pensioners will not get them, ministers have said. Rachel Reeves promised that 'more people will get winter fuel payments this winter', suggesting she would set out details of changes to eligibility at the spending review. She said a 'means test' would be introduced by the winter, despite concern that ageing government computer systems would struggle to adapt thresholds in time. Torsten Bell, the pensions minister, ruled out restoring universal payments to all pensioners. The level of the winter fuel payments means testing will increase this winter, the chancellor said. Reeves said she had to make 'difficult decisions' last year to 'restore sound public finances', but they are now on 'firmer footing'. She said she had also listened to concerns about the level of the means test. 'We will be making changes to that,' she said. 'They will be in place so pensioners are paid this coming winter. We will announce the details as soon as we possibly can. 'People should be in no doubt that the means test will increase and more people will get winter fuel this winter.' The government's deal with the United States will bring tariffs down to zero, the chancellor has said. Asked about steel tariffs for Britain being 25 per cent while the rest of the world is on 50 per cent, Rachel Reeves said the news of Britain's exemption had been 'welcomed by UK steel'. She said that was due to the work of Jonathan Reynolds, the business secretary, and the prime minister with the US. 'We have done a deal that will bring tariffs down to zero,' she added. 'We are still the only country that has done a deal with the US.' Spending on police will be increased in the spending review next week, the chancellor said. It comes after the commissioner of the Met Police, Sir Mark Rowley, wrote to the prime minister warning that police will face 'stark choices' about which crimes they investigate if the Treasury went ahead with cuts. Daisy Eastlake from The Times asked Reeves which crimes the government was happy for police to ignore. Rachel Reeves said: 'We will be increasing spending on police in the spending review next week. That is not a choice I would recognise.' Income tax, VAT, and National Insurance will not be increased, the chancellor said. Asked if she would reiterate the government's commitment on those taxes, Rachel Reeves said: 'I already said the commitment not to increase the key taxes working people make are promises that we stand by.' Rachel Reeves insisted Labour's manifesto commitments on policing, housing and energy were not at risk. Asked whether that was the case, the chancellor said: 'We made those commitments and we stick to them. The commitments in our manifesto were fully costed and fully funded.' It comes after reports that the home secretary, housing secretary and energy secretary are yet to reach settlements with the Treasury. The chancellor sought to paint a picture of investment before expected cuts in the spending review. On top of the increase in day-to-day spending, funded in part by the tax hikes Rachel Reeves set out in the autumn budget, she said looser borrowing rules would help support a £113 billion investment package. She said: 'Britain faces a binary choice: investment or decline, and I choose investment because I believe in an entrepreneurial and an active state and I reject wholeheartedly the old-fashioned, dogmatic view that the only good thing a government can do is get out of the way.' Connectivity is a 'critical factor in unlocking the potential' of towns and cities outside London, Reeves said. This is the 'biggest ever investment by a British government in transport links in city regions and surrounding towns', the chancellor said, before detailing each recipient of investment. This investment in transport will support British supply chains, Reeves promised, with new trains, buses and trams meaning orders for steel made in Britain. 'The government was presented with a choice to allow British Steel in Scunthorpe to close or intervene. 'I was not prepared to tolerate a situation where our steel capacity was undermined. I was not prepared to see another working-class community lose its pride. We intervened, we saved British Steel and jobs.' Rachel Reeves blamed 14 years of Conservative governance for the disappointments in the upcoming spending review. 'Not every department will get everything they want next week,' the chancellor admitted. 'I had to say no to things I want to do too.' It was not about her fiscal rules, she insisted, but the result of '14 years of mistreatment' of public services and the economy. The 'stability' that her fiscal rules supported and the choices she made at the budget in October had helped make improvements such as interest rate cuts, Reeves said. Nigel Farage and Reform UK are 'itching' to repeat the same 'reckless borrowing' as Liz Truss, Rachel Reeves warned. 'No one should need to be told about the dangers of reckless borrowing,' the chancellor said, pointing to the former Conservative government. 'Working people paid the price.' 'Be in no doubt, Nigel Farage and Reform are itching to repeat that exact same experiment. To pursue fantasy economics all over again.' 'The results would be the same,' she said. 'I will never take those risks, Labour will never take those risks.' A regional investment summit will be held this autumn, Rachel Reeves announced. 'I've been a Leeds MP for 15 years and I am painfully familiar with big promises that come to nothing,' the chancellor said. 'I know that brilliant talent is to be found right across our country. I know a prosperous UK depends on the economic strength of all its parts.' The summit will be hosted alongside the West Midlands mayor, Richard Parker, and the business secretary, Jonathan Reynolds. Next week's spending review will be 'targeted squarely' on renewal of Britain, the chancellor said. Reeves said the review would invest in security, health and economic growth and deliver on 'the promise of change to make you and your family better off'. The 'central challenge' the government faces is improving living standards and renewing public services, Rachel Reeves has said. 'I know how hard the last few years have been,' the chancellor said as she began her announcement. She added that underinvestment was the central barrier to growth. Before the chancellor's address, the mayor of Greater Manchester said: 'Good transport powers good growth.' Andy Burnham claimed the area was 'growing faster than the UK economy' at 3.1 per cent average annual growth in the first decade of devolution. 'The government is backing us and our message is we are backing you, we're backing the chancellor.' Today's announcement comes a week before the spending review on June 11, when cuts to department budgets are expected. Rachel Reeves will try to divert attention to the areas which will get a boost with today's transport announcement. Fears are already growing of the cuts that will affect public services and Sir Mark Rowley, head of the Metropolitan Police, has written to the prime minister to warn that some crimes will be ignored if police forces are hit. Some projects being backed today, such as the development of a mass transit network in West Yorkshire, formed part of the former prime minister Rishi Sunak's 'Network North' plan, intended to compensate for the decision to scrap the HS2 line north of Birmingham. After coming to power in July, Labour started a review of those projects, arguing they had not been fully funded. The chancellor will announce £15.6 billion to be spent on projects which are expected to include: • £2.4 billion for the West Midlands to fund an extension of the region's metro from Birmingham city centre to the new sports quarter• £2.1 billion to start building West Yorkshire Mass Transit by 2028• Greater Manchester will receive £2.5 billion for projects including new tram stops in Bury, Manchester and Oldham and an extension of the tram network to Stockport• £1.5 billion investment in South Yorkshire will include £530 million to renew the region's trams• The East Midlands will receive £2 billion to design a mass transit system between Derby and Nottingham• The West of England will receive £800 million, including £200 million to develop mass transit links between Bristol, Bath, South Gloucestershire and North Somerset Rachel Reeves will warn that Britain has become reliant on 'too few places' for economic growth as she promises £15 billion for transport links in the north and Midlands to spur growth and combat the threat of Reform. The chancellor will set out a dozen local transport projects designed to encourage growth in red wall areas where Nigel Farage is breathing down Labour's neck, promising to give 'every region a fair hearing' on bids for public cash. She will confirm a rewrite of Treasury investment rules designed to divert money away from the southeast towards areas that ministers say have been 'locked out' of public cash and left behind economically. • Read in full: Rachel Reeves pledges investment to boost north
The Independent
a day ago
- Business
- The Independent
Millions thrown into uncertainty over winter fuel payment update
The government will make changes to winter fuel payments, ensuring pensioners are paid this coming winter, but details on the level of payment and how it will be funded will not be announced until the Autumn budget. Pensions minister Torsten Bell said there is no prospect of returning to a universal winter fuel payment for all, as the government aims to avoid paying millionaires. Labour MP Rachael Maskell criticised the decision, saying that means-tested benefits often fail to reach vulnerable people. In July, the chancellor announced that pensioners not receiving pension credits or other means-tested benefits would no longer receive the winter fuel payment, reducing the number of recipients from 10.8 million to 1.5 million. Critics argue the cuts disproportionately harm vulnerable people, potentially forcing 100,000 pensioners into poverty by 2026.
