Why won’t Starmer reverse the cut to winter fuel allowance?

The prime minister has ruled out any change to the government’s decision to means-test pensioners’ winter fuel allowance (WFA). The measure, which was immediately controversial when announced by the chancellor last summer, is widely regarded as being an important factor in Labour’s poor showing in last week’s elections, and there was speculation that it might be adjusted.

The bald statement by the PM’s official spokesperson that “there will not be a change to the government’s policy” is designed to end the speculation. That seems unlikely...

It may be that they’ve decided the political price has been paid, and that they’ll just look weak if they adjust it or reverse it. Better, given where they are now, to look resolute, maybe. So, according to Downing Street, the rationale for the cut is precisely the same as was given by Rachel Reeves on 29 July 2024: the decision “was one that we had to take to ensure economic stability and repair the public finances following the £22bn black hole left by the previous government”.

Yes and no. All governments, even in the tightest of corners, have choices, even if none of them are particularly good ones. The thing about the cut to the WFA is that it was almost as though Reeves had been asked to design the least effective way to raise money, but with the most politically damaging results.

The cut was a high-profile and prominent one, because so many older households had been used to expecting the bonus of £200 (or £300 for the over-80s) every year as an entitlement. The fact that some didn’t need it, and it had never been consistently uprated with inflation since Gordon Brown introduced it in 1997, made no difference to the indignation at its withdrawal. It was done suddenly, only three weeks into the life of the new government, with no preparatory “spin” beforehand, let alone any mention in the manifesto.

As to the scale of the electoral impact, it is predicted to raise an extremely modest £1.5bn a year, but has affected around 10 million people across several million households in England and Wales (Scotland and Northern Ireland run different schemes). Being older, and upset, they’re more likely to register their distress at the ballot box. Arguably, if four unhappy pensioners in Runcorn had voted differently last week, Labour would have held that seat against expectations of loss.

Yes. Polling by More In Common shows the WFA cut to be almost the most unpopular thing Labour has done in government, not to mention one that everyone knows about and seems unlikely to forget.

Plainly, though Wes Streeting, careful to distance himself from the policy by stressing that it’s a matter for the Treasury and No 10, only went so far as to say there was no “formal” review before the announcement of no change came from Downing Street. There was some gossip last year that Keir Starmer regarded the move on WFA as a “mistake”, but it seems they’re sticking with it for now.

Not for long. The first minister of Wales, Eluned Morgan, for example, faces difficult elections for the Welsh parliament next year, and is only neck and neck with Reform and Plaid Cymru in the polls. She warns that the issue is “something that comes up time and again”. Labour backbenchers and union leaders also want a rethink.

Politically, it does enable Labour ministers to score a point against their Conservative and Reform opponents. So whenever an opposition politician (or indeed a Labour critic) casually says they’d bring back WFA for all, they can be asked: “How will you pay for it?” – a query in response to which there can only be silence or some mumbling about “savings”.

On an optimistic reading of the situation, weathering such political bombardment until better times vindicate her choices might make Reeves look more like the “Iron Chancellor” she aspires to be. On a pessimistic reading, it is the foundational panicky blunder that will see her premature departure from the Treasury.