Why Labour needs to compromise over winter fuel payments for pensioners

In her speech to the Labour conference, Chancellor Rachel Reeves received a sustained round of applause when she announced that next month’s Budget would see “no return to austerity”. “Conservative austerity was a destructive choice for our public service and for investment and growth too,” she said. “Yes, we must deal with the Tory legacy, and that means tough decisions, but I won’t let that dim our ambition for Britain.”

However, she also made clear that those “tough decisions” included ending universal winter fuel payments for pensioners – now only available to the poorest, with the Scottish Government following suit – despite heavy criticism from the Conservatives and some on the left of her own party.

For Labour ministers, the issue has become something of an article of faith, not just a way to save money but a means to demonstrate they are not a ‘tax and spend’, left-wing party which cannot be trusted with the country’s finances.

New Chancellor nerves

After leaving office, George Osborne revealed that he had been concerned about how the markets would respond to him as the new Conservative Chancellor in 2010, given his relative inexperience. And if he was worried, it would be understandable if Reeves was even more so. After Liz Truss and Kwasi Kwarteng, she now has a concrete example of just how much damage spooking the markets can do.

That said, the means-testing of winter fuel payments inevitably means those who just miss out are going to struggle. Amid suggestions that some pensioners could die – based on claims made by Labour under Jeremy Corbyn – some form of compromise might be sensible.

For example, a ‘hardship fund’ that would allow pensioners to make a claim for the payments would help those most in need, while also removing much of the political heat from the issue. The public sympathy is with them, not well-off elderly people who don’t really need the money. And even the latter would probably prefer it to be spent on ensuring the country has a functioning NHS.

Labour has said all the right things in their bid to be taken seriously. They now need to relax a little.