I have been a Labour loyalist for 45 years, but cutting the winter fuel allowance is short-sighted folly

The Labour government has made an impressive start. Few prime ministers can claim to have faced down a public service pay crisis and a spate of rightwing rioting within a month of taking office. In both cases Keir Starmer has met the challenge head-on, restoring a relationship with our public service workers and cracking down on the thugs who attempted to spread fear and disorder in our communities. With these successes under his belt, it would be a great pity if a single piece of policy were allowed to distract from the legacy that Starmer and the frontbench team are already building.
The chancellor, Rachel Reeves, has also proved herself to be extremely competent. She has been able to strike just the right blend of pragmatism and sensitivity, bringing business onside while also promising to address the years of neglect that have so badly undermined investment in our schools, hospitals and railways. However, I worry that in the – understandable – desire to balance books and fill the black hole in government coffers, which Jeremy Hunt conveniently forgot to mention, she, too, risks making a critical error.
Let me caveat what I am about to say with a reminder that I have been a Labour loyalist, in government and opposition, for 45 years. I oppose our proposal to cut the winter fuel allowance. This is not factional, or self-centred, but comes from a sincere belief that it will be a terrible blunder. Today’s price cap rise by Ofgem, which will increase the average energy bill in Britain by 10% to £1,717, makes reversing the decision to cut the allowance all the more urgent.
I understand the reasoning behind the cut – it seems patently wrong that those who clearly do not need it still receive it – but the speed with which we plan to introduce this change means there will be a devastating impact on hundreds of thousands of poorer pensioners who are not already on pension credit. Take-up for pension credit has never been close to 100% – it stands at a meagre 63% on the most recent figures (2022) and failed to rise above 66% for the last decade – and the lack of notice also means no pensioner has had the chance to save during the year to try to compensate.
Additionally, this winter pensioners will lose the cost of living payments they have had for the past two years, and some will also lose their household support fund grant. Admittedly, energy prices are lower than their peak a year or more ago, but today’s announcement of a £149 increase in the cap on energy prices will force even more people into fuel poverty this winter.
I have seen before how things that seem sensible at first turn out to have damaging consequences: Thatcher originally planned the community charge to be a small tax for non-ratepayers, but it morphed into the poll tax, which replaced rates and derailed both her and her government. Age charities throughout the UK are uniting behind a campaign to oppose the cut, which I believe, based on conversations with colleagues and constituents, is only likely to gain traction.
I am therefore urging Reeves to think again, as there is an alternative way forward: instead of setting up a confrontation with natural allies in the third sector, and elderly voters who have supported Labour all their lives, we could try to collaborate and find a compromise. Postponing the policy would give Labour time to think about mitigations to support the poorer pensioners who stand to lose this much-needed credit. It would also give Reeves and her team time to develop some long-term solutions, such as a social tariff for energy, that wouldn’t help just older people but everyone who struggles with energy bills throughout the year. Ultimately, there is an excellent case to be made for a widescale spending review that could help us properly identify where funding, throughout the system, is “wasted” on wealthy pensioners. I believe the sector would support this so long as appropriate safeguards were put in place.
It is never easy to acknowledge a mistake, particularly in the first months of a new government, as it feels like this will set the tone for the rest of the parliamentary term. However, it is equally important for a party to be able to identify occasions when a misstep has been taken and will ultimately prove far more costly, politically, than a quick reversal. I know there is widespread support, on the Labour benches, for a rethink and that Reeves can demonstrate she is the statesperson I know her to be by telling the Treasury mandarins to think again. An ability to acknowledge and correct errors is precisely the type of change that the British public want to see in our politics.