Winter fuel payments for all pensioners were, according to Gordon Brown, one of the greatest achievements of the last Labour administration. It was the bitterly cold winter during the miners’ strike that brought home to him the disastrous effects that means testing had on elderly people. New Labour lifted more than a million pensioners out of relative poverty. It is odd that the next Labour prime minister seems intent on repudiating that legacy.
Sir Keir Starmer wants to do away with the “untargeted” payments – worth up to £300 – from 10 million pensioners, when energy bills rise by 10%, to save the Treasury £1.4bn. This is mean, unjust and politically inept. There is widespread disquiet in Labour, which traditionally argues that universalism matters for poverty prevention because it generates public support for welfare spending. An early day motion asking for the change to be reconsidered has been organised by newly elected centrist MPs. Others say that withdrawing winter fuel payments for those in fuel poverty will lead to excess deaths.
The government can’t cure the lethal consequences of deprivation by increasing deprivation. Eligibility for the payment will be linked to pension credit, but experts say that this will see 1.6 million pensioners who are below the poverty line lose vital financial support during the coldest months. With a majority of 167, the government will comfortably win Tuesday’s vote on the issue. However, it has lost the argument, largely because ministers seem incapable of making a coherent case for their policy.
The risible claim that there would be a “run on the pound” if there were not spending cuts was dismissed in the City. Ministers then said that they want to increase pension credit uptake – currently 880,000 eligible people do not claim it – but many are put off by the 243 questions that need to be answered in the application form. Sir Keir argues that the losses would be offset by rises in the state pension. But that won’t wash with many pensioners who know such increases were coming anyway and have been less than impressed by Labour discarding its social care commitments.
Backbench rebellions damage perceptions of party discipline. The prime minister has demanded loyalty. By removing the whip from Labour MPs who rebelled in July over benefits, his message was that party unity trumps moral and political considerations. This is unsustainable when promoting policies that are disliked not only by swathes of the party membership but much of the electorate too. The prime minister claims that his government is “going to have to be unpopular” to deliver change. The question is whether the change he has in mind is for the worse rather than the better.
The mess reflects badly on the political judgment of his chancellor, Rachel Reeves. She might think that is unfair. Her predecessor Mr Brown entered office claiming that the Tories underestimated Britain’s borrowing requirements by £20bn. He spent his first two years reducing, as a percentage of national income, government spending. He also cut benefits for lone parents, with MPs rebelling just months after being elected. He made up for the loss through tax credits. Mr Brown, however, promised “prudence with a purpose”, justifying his early parsimony with a pledge to invest later in public services. Sir Keir’s problem is that, so far, he only offers pain. Voters aren’t fools. They know when they are being told the light at the end of the tunnel is that of an incoming train.
