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Delegates at the annual Labour Party conference in Liverpool on Wednesday voted to reverse the introduction of “means-testing for the winter fuel allowance” as part of a union motion.
The vote will be seen as a blow for Sir Keir Starmer and Rachel Reeves, even though motions at the party conference are non-binding and the government is not required to respond to them. But it highlights major division within the party over the controversial policy.
Speaking to Channel 4 News after the debate, Sir Keir said he and his ministers had made “a difficult decision, taken because the last government left a £22bn black hole”.
The PM said: “I do understand how, you know, colleagues in the Labour movement feel about this. This is clearly a difficult decision but a motion at conference doesn’t dictate government policy.”
In July, Rachel Reeves announced that older people not in receipt of pension credits or other means-tested benefits will no longer receive winter fuel payments from this year onwards.
The decision came as part of a series of spending cuts to address a “black hole” in the public finances left by the previous Conservative government announced in July by the chancellor.
The winter fuel payment is a payment of either £200 or £300 to help pensioners with their heating bills.
Around 10 million pensioners and 7 million pensioner households are expected to be affected by the changes. Ms Reeves and Sir Keir have argued that increases in the state pension will outweigh the cut, leaving pensioners better off than they are currently even without winter fuel payments.
The motion, which was passed by a show of hands, said: “Britain cannot wait for growth, nor turn back to failed austerity.
“We need a vision where pensioners are not the first to face a new wave of cuts and those that profited from decades of deregulation finally help to rebuild Britain.”
It also calls for an end to the “fiscal rules which prevent borrowing to invest” brought in under the previous Tory government, as well as the introduction of wealth taxes to ensure there are “no further cuts to welfare provision for working people and pensioners”.
They propose taxing the top 1 per cent, equalising capital gains tax with income tax and imposing national insurance on investment income.
Unite general secretary Sharon Graham has described the policy as “cruel”, urging the prime minister to admit he made a “misstep”.
She said: “The first thing Labour does is to take away the winter fuel allowance from the poorest in our society while they leave the wealthiest people pretty much untouched.”
Speaking ahead of the vote on Wednesday morning, Ms Graham said: “I do not understand how our new Labour government can cut the winter fuel allowance for pensioners and leave the super-rich untouched.
“This is not what people voted for. It is the wrong decision and needs to be reversed.
“Friends, we are the sixth richest economy in the world. We have the money. Britain needs investment, not austerity mark two. We won’t get any gold badge for shaving peanuts off our debt.”
Green Party co-leader Carla Denyer also stuck the boot in over the row, saying there is a “goundswell of support” for changing course on the policy.
She added: “Targeting some of the most vulnerable to fix the supposed black hole in the public finances is cruel and unnecessary.
“There is another way. A fairer way. As the successful motion by Unite makes clear, taxing multi-millionaires and billionaires a little more would not only easily cover the cost of winter fuel payments for all pensioners but also generate additional funds for much needed investment in our health and social care services.”
Simon Francis, End Fuel Poverty Coalition coordinator, said: “Labour conference has understood what ministers have failed to acknowledge, that removing the winter fuel payment at short notice and from so many people is wrong.”
Labour will not U-turn on the policy despite the rebellion. A spokesperson said: “Labour was elected on our manifesto commitment to sound fiscal rules, economic growth is our primary mission and we will take the tough decisions now to rebuild Britain.”
