by Rachel Reeves says pensioners are on course for a £1,700 boost under Labor as she tries to fend off a revolt over winter fuel payment cuts.
Writing for the Telegraph on Monday ahead of a crunch vote on the policy, the chancellor reveals Treasury estimates for the potential rise in the state pension over the next five years.
The Treasury is telling would-be Labor rebels that the rise in state pensions thanks to the triple lock outweighs the impact of ending winter fuel payments for all pensioners.
But unease remains among Labor MPs, with around 40 said to be considering rebellion by abstaining from the House of Commons vote on the policy today or voting against it.
Unions to be behind rebels to raise their concerns, with one union leader comparing Ms Reeves on Monday to the Grinch who stole Christmas.
10 million pensioners to lose payouts
In July, Miss Reeves announced that winter fuel payments of up to £300 will no longer be given to all pensioners.
Instead, it will be means-tested, going to those on pension credit only. It means that 10 million of the 11 million who were receiving the payments will lose.
The Government has come under fire for cutting pensioners’ payments while funding out-of-inflation pay deals for public sector workers, including train drivers and junior doctors.
Pensioners are already bracing for the cut, with a new survey suggesting half are planning to heat their homes less this winter.
In her article, Miss Reeves argues that the decision to remove most pensioners from payments was necessary to help fill a £22 billion spending “black hole” left by the Tories this year when they were in government.
Meanwhile a Labor government minister on Monday failed to scrap free bus passes for all pensioners, prompting more speculation about the cuts to the elderly.
Miss Reeves writes: “The easiest thing I could have done during my first weeks in office was to take the hard decisions and walk away. What the Conservatives have done time and time again: put short-term interests ahead of the national interest.”
She later says: “These were not choices I wanted to make or expected to make, but they were the right choice to achieve our promise of economic stability.
“And with that stability we can deliver a Britain that is better off. That drives my politics and the decisions I make in government every day.
“It’s because we’re delivering on our manifesto promise to protect the triple lock, so we can put more money in pensioners’ pockets every year. The New Total State Pension alone will be worth around £1,700 more before the next election.”
No hint of turn around
Despite weeks of pressure from Independent Labor MPs and old-age charities, she has not hinted at the policy.
The £1,700 figure is a new Treasury estimate of how much a pensioner will benefit from the triple lock between now and 2029, when the next general election is due.
The triple lock ensures that the state pension rises each year by the higher of inflation, pay rises or 2.5 per cent. It was a Tory policy to keep Labor’s decisions in the election.
The latest pay rise figure is published on Tuesday, allowing pensioners to learn how much their state pension will rise next year, as it is currently the highest of the three measures. The increase is expected to be around £400.
Some Labor MPs are expressing concern that the threshold for withdrawing the winter fuel payments is too low.
Only 5 computers are registered for pension credit
The Exchequer is pushing to get the 800,000 people who qualify for pension credit but are not yet registered to register.
But new figures show that less than 5 per cent of those people have applied in the five weeks since the cut was announced.
Older Brits who earn £13,000 but do not qualify for pension credit will lose the payment. Critics have said that these people will have to choose between “warming and eating”.
New analysis by the Resolution Foundation, an influential think tank in Labor circles, has found that 1.3 million pensioner families living in poverty will lose out on payments after housing costs are taken into account.
Ms Reeves tried to win over skeptics as she addressed Labor MPs behind closed doors on Monday night.
She told a meeting of the Parliamentary Labor Party: “Tougher decisions are to come. I don’t say that because I like it. I don’t, but it is a reflection of the legacy that lies ahead of us. So, when members are looking at where to apportion the blame, when pensioners are looking at where to apportion blame, I tell you where the blame lies. It fits the Conservatives and the reckless decisions they made.”
Meanwhile Sir Keir Starmer will tell the Trades Union Conference on Tuesday that they cannot have pay rises that threaten economic stability following demands for above-inflation rises for all public sector workers.
Sir Keir will say: “I must make it clear, from a particular point of view, that this government will not, under any circumstances, compromise its mandate for economic stability. And with difficult decisions to come, that will certainly shape wages.”
Mick Lynch, general secretary of the RMT rail union, called for the winter fuel cut to be reversed on Monday, saying: “The call has to be on Rachel Reeves and Keir Starmer, so that’s where I think it’s headed … to correct this mistake.
“Why would you want to get off on the wrong foot in the first Budget by appearing as the Grinch at Christmas?”
Outgoing Conservative leader Rishi Sunak said: “Labour MPs know this is indefensible – they must do the right thing and force the Government to come clean about the impact of this punitive cut.”
Tough decisions today will ensure Britain’s long-term prosperity
By Rachel Reeves
The choices facing this new government have never been easy. We have inherited an economy that has barely grown in 14 years. The national debt has more than doubled since 2010. Our public services, like the NHS, are broken after 14 years of underfunding and lack of reform. And families are worse off because successive governments have failed to prioritize stability and growth.
Those choices were made even more difficult in the days after the general election when the Treasury handed me a £22 billion black hole
in the public finances left by the Conservative Party. That is also a £22 billion overspend this year.
Did the Conservatives reveal this to government spending watchdogs? Did they reveal it to Parliament? And did they reveal it to the British people before the election? No. It is a damning indictment of the record of the Conservatives in power. Party first, country second. They promised responsibility but were presided over by unimaginable blunders.
Now the easiest thing I could have done in my first weeks in office was to make the difficult decisions and make the difficult decisions. What the Conservatives have done time and time again: put short-term interests ahead of the national interest. Leaving additional loans unchecked. To give up economic and financial stability.
I was not – and am not – prepared to do that because it is the British people who are left to pay the price. This Labor Government was elected on a clear mandate of change. That change can only happen by fixing the foundations of our economy. That is why economic stability was the first step in our manifesto, because I know, as every family and business knows, that prosperity can only happen on the foundation of strong public finances.
Delivering that change means tough decisions, including canceling underfunded road projects, reviewing the new hospital program to deliver a realistic plan, and focusing winter fuel payments on the most vulnerable. more that they need. These were not choices I wanted to make and expected to make, but they were the right choice to deliver on our promise of economic stability. And with that stability we can deliver a better Britain. That drives my politics and the decisions I make in government every day. That’s why we’re delivering on our manifesto promise to protect the triple lock, so we can put more money in pensioners’ pockets every year. The full State Pension alone will be worth around £1,700 more before the next election.
That’s why we’ve guaranteed no increase in national insurance contributions, income tax rates or VAT, so we can protect family budgets. That’s why we’re fixing our broken planning system, so the next generation can achieve the dream of home ownership. And it’s why we’re working with business, so we can invest with confidence and create the growth we need to fund our public services and reduce debt.
We have had to make difficult decisions – and there will be more to come. But just as Keir Starmer changed the Labor Party for the better, I know we can change Britain for the better. We will lay the foundations, we will rebuild the best Britain from it. That is the change we were elected to – and it is the change we will make.
Rachel Reeves is the Chancellor of the Exchequer
