Chancellor Rachel Reeves hits out at 'mess created by previous government' on eve of unpopular winter fuel payment vote

10 September 2024, 00:45 | Updated: 10 September 2024, 07:37

Chancellor Rachel Reeves has made a final effort to convince her MPs that it is the correct decision to cut the winter fuel payments for most pensioners - and says the Tories are to blame.

Speaking at a meeting of the Parliamentary Labour Party (PLP) in the Commons on Monday night, she said she was "not immune to the arguments" that many of them had made against the "difficult decision", and insisted ministers had "considered" them all.

But she said it was "the right thing to do - to target money, at a time when finances are so stretched, at people who need [it] most."

Ms Reeves was speaking to her backbenchers on the eve of a vote on the policy in parliament, which would limit winter fuel payments to those on pension credit, rather than giving them to everyone over state pension age to help with energy bills -

It would mean approximately 10 million people would lose the benefit.

Rumours had gone round that the government could be planning to soften the blow for those no longer eligible, but asked earlier if the cabinet had discussed it on Monday, Sir Keir Starmer's spokesman said: "Not at all."

He added: "The cabinet are in agreement that we need to fix the foundations of our economy, and this is the mandate that they have been asked by the country to deliver."

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A spokesperson for the chancellor said backbenchers had shown her "strong support".

But it is understood about 30 Labour MPs are unhappy with the decision to cut winter fuel payments from 16 September.

However, they are expected to abstain on Tuesday's vote, rather than go against the government, after Sir Keir suspended seven Labour MPs for six months rebelling in July.

At least two of those suspended MPs - former shadow chancellor John McDonnell and Zarah Sultana - have confirmed they will vote against the measure on Tuesday.

Sir Keir would not say if he would suspend any more MPs for rebelling this time round, telling the BBC on Sunday: "That will be a matter for the chief whip."

Speaking to MPs, Ms Reeves outlined how the state pension had risen by £900 compared with a year ago, and it was set to go up further following Labour's pledge to keep the so-called "triple lock".

She also pointed to a campaign to ensure people are taking up pension credit if they are entitled to it, as well other benefits, with a 115% increase in people applying in the five weeks since the government announced the winter fuel payment cut - a total of 38,500 claims.

The chancellor said: "Why are we having to make these savings? It's not because we plan to, not because we wanted to, but because there's a £22bn black hole in the public finances because of the mess created by the previous government."

"The first step of our manifesto was delivering economic stability. This £22bn black hole would pose a risk to our financial stability and would mean that we would break our fiscal rules."

Ms Reeves also warned of "more difficult decisions to come", with her first budget due at the end of October."

"I don't say that because I relish it," she added. "I don't. But it is a reflection of the inheritance that we face."

So, when members are looking at where to apportion blame, when pensioners are looking where to apportion blame, I tell you where the blame lies. It lies with the Conservatives and the reckless decisions that they made."

The prime minister will address the Trades Union Congress (TUC) conference on Tuesday, where he is set to be questioned about the winter fuel payment cut and workers' rights.

Sharon Graham, head of Unite, the largest trade union, has called for Sir Keir to U-turn on the policy as she said the public cannot understand why a Labour government is choosing to "pick the pocket of pensioners" while leaving the richest "totally untouched".