The gov't has confirmed a U-turn on ending universal Winter Fuel Payments for pensioners this morning. The gov't had been under significant pressure to change course from its own backbenchers and the opposition, with the U-turn widely expected but, until today, not confirmed.
- Hygo Gye at The I Paper posts on X: "Govt confirms U-turn on cuts to winter fuel payment. Every pensioner earning less than £35,000 in taxable income will receive the payment this winter. Decision will cost £1.25bn - a black hole to be filled in at the Budget". Beth Rigby at Sky News: "That’s 9m - 3/4 - of all pensioners at cost of £1.25bn. Govt will save £450m on means testing > Size of reversal reflective of the scale of misstep".
- Chancellor of the Exchequer Rachel Reeves: “Targeting Winter Fuel Payments was a tough decision, but the right decision because of the inheritance we had been left by the previous government. It is also right that we continue to means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest."
- With regards to impact on future policy, there is the prospect that backbenchers and ministers on the left of PM Sir Keir Starmer's Labour party see the U-turn as a signal that the gov't will not keep to hard-lines on welfare cutting measures. Given Reeves' almost non-existant fiscal headroom, this could bolster the chances of tax hikes coming further down the line rather than spending reductions.