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CHANCELLOR Rachel Reeves last night faced calls to apologise for putting nine million people through winter fuel misery.
In a screeching U-turn yesterday, she restored the payment to pensioners with an annual income of £35,000 or less.
Chancellor Rachel Reeves is facing calls to apologise over the winter fuel payment U-turnPA
AlamyShe has been urged to make the apology for putting nine million people through winter fuel misery[/caption]
She couldn’t say how she’ll pay, with tax rises feared.
Tories called it a “humiliation” as she was accused of creating her own financial black hole.
It marked the culmination of one of the biggest political U-turns in modern history following fury at the mass benefit snatching last July.
Handing back the £200-£300 sum to three quarters of pensioners will cost the Treasury £1.25billion, and only saves £450million from when it was universal.
This humiliating U-turn will come as scant comfort to the pensioners forced to choose between heating and eating last winter.
Kemi BadenochBut Ms Reeves could not say yesterday how the U-turn would be funded, saying there was still “work to do to ensure the sums add up”.
She axed the universal payment last July in a bid to save £1.5billion — after claiming the Tories had left a £22billion financial black hole.
Yesterday Shadow Chancellor Mel Stride hit back: “Rachel Reeves has created her own black hole and now she’s scrambling to fill it with borrowed money or likely tax rises.”
Voters will remember winter fuel debacle for a long time
By Jack Elsom, Political Editor
AS political u-turns go, Rachel Reeves’ retreat on winter fuel payments will surely go down as one of the biggest – and messiest – in history.
Her first act as Chancellor to snatch the cold weather cash from 10million pensioners has today been spectacularly dumped.
Nine million OAPs will now get the benefit, meaning all but the richest will claw back the £200-£300 sum.
With a price tag of £1.25billion, this whole palaver has only saved the Treasury £450million.
It’s chicken feed in the grand scheme of things, and a tenth of the annual migrant hotel bill.
But the political cost has been devastating.
Labour insiders trace their spanking at last month’s local elections back to Ms Reeves’ toxic decision in the weeks after the election.
That the winter fuel policy was still coming up on doorsteps 10 months later was a sign it was destined for the shredder.
Yet rather than ripping off the plaster cleanly, the past few weeks have seen an agonising u-turn mired in chaos and confusion.
And the Government is still not clear how it will be funded.
Four years is a long time until the next general election, and Sir Keir Starmer and Ms Reeves will be hoping voters would have since moved on.
But – even with today’s backing down – the winter fuel debacle is likely to live long in the memory of the electorate and haunt Labour for a while to come.
Ms Reeves, asked to rule out tax rises, said: “We will set out all of the policies in the Budget.
“But we wanted to announce today the level at which the winter fuel payment will be paid because that means we can put the processes in place.”
No 10 insisted it is committed not to raise income tax, National Insurance or VAT.
The decision to means-test winter fuel payments at just £11,000 was one of the first decisions made by the new Labour Government and proved toxic with voters.
The move led to months of pressure until last month when PM Sir Keir Starmer vowed to revise the threshold.
It followed a Labour drubbing in the local elections.
Tory leader Kemi Badenoch said yesterday: “This humiliating U-turn will come as scant comfort to the pensioners forced to choose between heating and eating last winter.
“The Prime Minister should apologise for his terrible judgment.”
Ms Reeves was still in the crosshairs last night as experts questioned how the payments would be funded.
Paul Johnson, of the Institute for Fiscal Studies, warned it will lead to additional taxes or possibly welfare cuts.
He rubbished Labour’s claims to have acted because the economy has improved, saying it “flies in the face of reality”.
‘Blind panic’
Mr Stride said the about-turn raised more questions than it answers.
He added: “They already spent the savings from this policy on inflation-busting pay deals for the unions.
“So where is the £1.25billion needed to pay for this U-turn going to come from?”
Reform UK’s Nigel Farage said Labour were in a “blind panic”, adding: “This U-turn would never have happened without Reform UK.”
Experts have questioned how the payments would be funded after the Chancellor’s U-turnGetty
Yesterday Ms Reeves declined to apologise when she met pensioners at Castlehaven Horticulture hub in Camden, North London.
She insisted: “The irresponsible thing to have done last year was to allow the public finances to carry on on an unsustainable footing.
“That would have resulted in interest rates going up, costing more in mortgages and rents.
“I’m always going to put stability in our economy first.”
The winter fuel payment will be £200 per household or £300 where someone is over the age of 80. They will receive it automatically.
How do I apply for pension credit?
YOU can start your application up to four months before you reach state pension age.
Applications for pension credit can be made on the government website or by ringing the pension credit claim line on 0800 99 1234.
You can get a friend or family member to ring for you, but you’ll need to be with them when they do.
You’ll need the following information about you and your partner if you have one:
National Insurance number Information about any income, savings and investments you have Information about your income, savings and investments on the date you want to backdate your application to (usually three months ago or the date you reached state pension age)You can also check your eligibility online by visiting www.gov.uk/pension-credit first.
If you claim after you reach pension age, you can backdate your claim for up to three months.
For those above the threshold it will be clawed back by HMRC.
Around two million of the richest pensioners in England and Wales miss out.
The £450million saved by withholding the payment from the richest is less than ten per cent of the annual spend to keep migrants in hotels and look after them.
Meanwhile, pensions minister Torsten Bell indicated that the Government could end the two-child benefit cap following a review.
He said huge percentages of families are in poverty which can’t carry on.
He added: “All levers to reduce child poverty are on the table.
“The child poverty strategy will be published in the autumn.”
Campaigners say lifting the cap would take 500,000 children out of poverty by the end of the decade but cost £4.5billion.
COOP’S COUP
AlamyYvette Cooper and Rachel Reeves finally reached a breakthrough in their budget negotiations[/caption]
RACHEL Reeves and Yvette Cooper last night finally reached a breakthrough in their budget negotiations.
The Chancellor’s review was said to be settled as the Home Secretary agreed to her funding package after weeks of haggling.
Tomorrow, Ms Reeves will reveal how much cash goes to each department.
The Defence and Health departments will receive the biggest boost, with others squeezed.
Ms Cooper was the last to settle in a row over potential cuts to police, who will now get a real-terms increase.
Sir Keir Starmer’s spokesman yesterday said: “The spending review is settled.
“We will be focused on investing in Britain’s renewal so all working people are better off.”
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