Winter fuel allowance: Sir Keir Starmer wants more pensioners to be eligible in payment axe U-turn

Sir Keir Starmer has been called on to provide urgent clarity over exactly who will have their winter fuel payments restored as he signalled a partial U-turn to the decision to strip millions of pensioners of the allowance.

The Prime Minister said “as the economy improves”, he wanted to look at widening eligibility for the payments worth up to £300.

The U-turn, announced during Prime Minister’s Questions (PMQs) on Wednesday, follows months of sustained pressure to reverse the decision to means test the previously universal payment, after availability was cut within weeks of Labour taking office last year.

Campaign groups responded to the announcement by demanding reassurances that more pensioners would receive the benefit for the coming winter. Downing Street officials were unable to say how many more pensioners would be eligible or when the policy would be altered.

Sir Keir Starmer has indicated a partial U-turn on winter fuel payments

The policy climbdown was confirmed on a day where further pressure mounted on Chancellor Rachel Reeves, with inflation rocketing to its highest level in more than a year. Official figures showed Consumer Prices Index (CPI) inflation jumped to 3.5 per cent in April - up from 2.6 per cent in March and the highest since January last year.

First Minister John Swinney said no U-turn could change the fact the UK government chose to remove the winter fuel payment from pensioners, claiming the decision so early in Labour’s first term in office had left people “dumbfounded”.

It comes just 48 hours after Mr Swinney confirmed a universal pension age winter fuel payment would be introduced by his Government in Scotland by St Andrew’s Day on November 30.

Under the Scottish Government’s plans for the winter, every pensioner household will receive £100, and some will receive £200 or £300 depending on their age and means. About one million pensioners are expected to benefit from the policy.

READ MORE: North Sea leaders and energy workers urge Keir Starmer to scrap oil and gas windfall tax

The impact of the winter fuel allowance cut

The decision to means-test the previously universal payment was one of the first announcements by Ms Reeves after Labour’s landslide election victory last year and has been widely blamed for the party’s collapse in support.

It was an issue that Labour campaigners were challenged about on the doorsteps during May’s elections, which saw the party lose councillors and the Runcorn and Helsby parliamentary by-election.

The UK government insisted the policy was necessary to help stabilise the public finances, allowing the improvements in the economic picture which Sir Keir said could result in the partial reversal of the measure.

Speaking at PMQs on Wednesday, Sir Keir said he understood the financial pressures on pensioners as he announced a partial rollback.

Join the thousands of Scots who receive our newsletter every day

“I recognise that people are still feeling the pressure of the cost-of-living crisis, including pensioners,” Sir Keir told the Commons.

“As the economy improves, we want to make sure people feel those improvements in their days as their lives go forward. That is why we want to ensure that, as we go forward, more pensioners are eligible for winter fuel payments.”

However, Sir Keir stressed his government would “only make decisions we can afford” and would therefore look at this as part of a “fiscal event”. The stance suggests a change will not be announced before the Chancellor’s Autumn Budget.

Prime Minister Sir Keir Starmer making a statement to MPs in the House of Commons, on the trade deal with the EU. PIC: House of Commons/UK Parliament/PA Wire

National charity Independent Age welcome the announcement as it described the decision to means test winter fuel payments by linking the entitlement to pension credit as “misguided”.

But the organisation said: “While this news will bring some relief to older people on a low income who lost the winter fuel payment, there will still be a period of uncertainty and anxiety until details about who is eligible are clearly announced and detailed.

“At a time when higher bills and rising inflation are stretching budgets to breaking point, older people on low incomes need reassurance that they will be supported to heat their home next winter and beyond. The UK government must provide clarity and act now.”

Conservative Party leader Kemi Badenoch challenged Sir Keir in the Commons, calling him “desperate” and asking how the public could trust him again.

She later said it was a “joke” for Sir Keir to say he was reacting to an improving economy after figures showed inflation soaring last month.

Ms Badenoch said she would like to see pensioners on £11,000 to £15,000 a year getting winter fuel payments and that it would be “too late” if Sir Keir waits until the autumn budget to set out the details.

Finding a mechanism to widen eligibility for the payment will cause headaches in Whitehall after the decision to link it to the pension credit threshold. Officials fear that simply increasing the pension credit threshold would increase take-up of that benefit, wiping out any potential savings.

The Prime Minister’s official spokesman was unable to give details about how Sir Keir would deliver on his promise or how many pensioners would benefit.

Mr Swinney refused to commit to passing on all increases in funding from the UK to the Scottish equivalent, with the winter fuel payment devolved north of the Border.

Last year’s decision to remove the universal element from the fuel allowance had initially forced the Scottish Government to delay the creation of its own alternative due to worries about funding.

Mr Swinney said: “Now the SNP Government has intervened and we’ve restored those payments to pensioners in Scotland and that was the right thing for us to do. But it was the wrong thing for the Labour government to do to take away those payments.

“We don’t know what the Prime Minister is proposing to do, it’s one line at Prime Minister’s Questions. So no amount of humming and hawing from the Prime Minister will detract from the fact that Labour took away the winter fuel payments and the SNP has restored them in Scotland.”

Unite general secretary Sharon Graham described Sir Keir’s statement as a “step in the right direction”, but stressed: “Pensioners’ minds need to be put at rest now – rather than dangling a promise to make a move in the autumn.”

Ms Graham added: "The winter fuel decision should be fully reversed and money should be found instead by implementing a wealth tax on the super-rich.”

Veteran Labour left-winger Diane Abbott had earlier said the policy was like the poll tax in the way it had “cut through” to voters.

Scottish Green MSP Maggie Chapman called on the Chancellor to resign. Ms Reeves and UK environment secretary Steve Reed had both been forced to defend the decision to means-test the payment during media interviews on Wednesday morning - just hours before the Prime Minister spoke in the Commons.

Ms Chapman said: “Labour’s backtracking is far too little, too late for many. Pensioners shouldn’t have had to wait for Keir Starmer and Rachel Reeves to find their principles down the back of the couch ... this heartless decision, and the other economic policies coming out of 11 Downing Street, have been a disaster for people across the UK. Keir Starmer clearly knows this. It’s time for Rachel Reeves to be shown the door for this second wave of austerity.”