Keir Starmer and Rachel Reeves in March 2024. The pair have defended the decision to cut winter fuel payments.
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Labour’s “cruel” cut to the winter fuel payment will go ahead after a Conservative motion to block it failed to pass the House of Commons.
Some 348 MPs backed the government’s plan to scrap the annual payment for 10 million pensioners in a vote in the Commons today (10 September), while 228 supported the opposition motion.
Just one Labour MP – Jon Trickett – voted against the government, while 53 Labour MPs abstained. The full scale of this rebellion is unclear as some of those who did not record a vote may have not attended due to other commitments.
“I will sleep well tonight knowing that I voted to defend my constituents,” Trickett said in a statement posted to social media.
Labour’s Rachel Maskell, who abstained, called on the government to “delay and get this right”.
“It is with my conscience that I cannot vote for these measures, but I am determined to work with the government to find crucial mitigation,” she said.
John McDonnell – previous Labour shadow chancellor of the Exchequer who had the whip removed after July’s vote – today said that he could not vote in good conscience for a policy that would “impoverish” his constituents.
“The heaviest burden isn’t being placed on those [with broadest] shoulders. It’s being placed on some of the poorest,” he said.
“I just think we’re in an unnecessary position when there’s so much else we could be doing… equalising capital gains tax, tackling corporate tax relief issues, making sure that the city pays its way. [This policy] flies against everything I believe in as a Labour MP about tackling inequality and poverty within our society.”
How will the winter fuel payment change?
The winter fuel payment is worth between £250 and £600 annually. It will now only be available to people receiving pension credit or other means-tested benefits.
Ahead of the vote, Labour MP Neil Duncan-Jordan submitted a motion warning that the cut “fails to take account for those people with modest incomes that are just above the entitlement threshold for pension credit”.
Indeed, Age UK has warned that nearly two thirds (64%) of pensioners in poverty could be excluded from receiving the winter fuel allowance. Almost 450,000 people have signed an Age UK petition against the policy.
However, pensions secretary Liz Kendall claimed the public finances can’t afford to pay a benefit to wealthier pensioners.
“This is not a decision we wanted or expected to make. But when we promised we would be responsible with taxpayers money, we meant it.”
Speaking in parliament, Dame Meg Hillier – Labour MP and the new chair of the Treasury Select Committee – justified the cut on the basis that it would protect vital public spending on the NHS.
“Many of the same people who will be suffering this cut to their income… will be the same people queuing and waiting for a hospital appointment,” she said.
“So we need to make choices, and one of those choices the government is making is to make sure that we pull those waiting lists back.”
Opposition MPs, however, were not convinced. Shadow secretary of state for work and pensions Mel Stride slammed the “absurd” decision, decrying the haste with which it was being “pushed through” parliament.
“Nine out of 10 pensioners will lose the winter fuel payment up to £300, at the most difficult time of year for millions of them… the suggestion from the members opposite that somehow this is just the wealthy that are affected, the millionaires? Far from it, two-thirds of those pensioners who are living below the poverty line will have this benefit removed.”
Economists have also slammed the outcome, albeit for different reasons to Stride.
Dutt questioned the government’s claim of a “black hole” in public finances, calling on the government to invest money rather than withhold it.
“Thinking of public finances as a household budget is not economically sound,” she said. “The government is not a household, the government is not a corporation. The government is the government, and they do have the power to spend more, while cuts have a really far-reaching impact.”
Unlike a household, the government has the powerful backing of a central bank behind it and can borrow money at lower costs. Additionally cuts to spending – which might work for a family trying to save money – can reduce government income. For example, austerity caused job losses, which slows economic growth and increases demand on public services.
“The UK economy is in dire need of a break from austerity policies that it has been subject to for the previous 14 years,” Dutt added.
“Austerity’s goal is to make the government smaller, to increase private investment, generate growth, and improve people’s lives. But none of this happens – studies have shown it simply doesn’t work,” she said.
“Government investment grows the economy and makes people’s lives better, cuts do not.”
Dutt added that the winter fuel payments have a “modest impact” on public finances – but a “huge impact” on vulnerable pensioners.
“This is going to worsen the health of older people in this country,” she said. “This is a really bad decision, and it’s a decision that doesn’t need to be made.”
Labour party research commissioned in 2017 showed that plans to means test the payment would be the “single biggest attack on pensioners in a generation” and could kill 4,000 people.
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