Winter Fuel Payments explained: What will change, who is affected and why is it so controversial?

Today will see MPs vote on whether to cut winter fuel payments to the majority of pensioners

Today will see MPs vote on whether to cut winter fuel payments to the majority of pensioners, as it pushes ahead with its plans to means test the winter fuel allowance payments in a bid to cut government spending and fill what it says is a £22bn black hole left by the last government in the country’s finances.

The vote is now being talked of as a major test for Prime Minister Keir Starmer’s leadership, as he faces down rebellion among a small group of Labour MPs as well as from critics outside of his party.

In light of the controversy caused by the policy change, Starmer used his first major interview as Prime Minister over the weekend to declare that he was willing to be “unpopular” in order to shore up the country’s finances.

So, what are the winter fuel payments, what is being changed and why are the proposed changes controversial?

What is the Winter Fuel Payment?

The Winter Fuel Payment was brought in back in 1997, when Labour returned to power. It is designed to ensure pensioners can afford to pay their energy bills when temperatures drop.

It is a one-off tax-free payment of up to £300 each year, determined by age. Until now, it had been paid to all pensioners in England and Wales to help with energy bills. It is universal and paid to everyone, irrespective of income or wealth.

What is changing?

In a speech made in July, Chancellor Rachel Reeves announced that the winter fuel benefit would now be means-tested in order to save £1.5bn a year.

The winter fuel payment will be limited to only those over state pension age who claim pension credit or one of the following benefits:

• Income-related Employment and Support Allowance (ESA)

• Income-based Jobseeker’s Allowance (JSA)

Who will be impacted?

As a result of the changes and payment only being given to the very poorest pensioners, the number of those who receive the winter fuel payment will reduce from more than 11 million to about 1.5 million.

Why are the proposed changes controversial?

The proposed changes are facing opposition and have triggered a revolt, including among some Labour MPs. MPs have received more letters on this issue than any other in recent years.

Almost 450,000 people have signed an Age UK petition against the move. Critics say that among the millions of pensioners set to lose out are around 1.6 million below the poverty line.

Those against the policy also say that the threshold for the cut is notably low.

What’s the Labour government’s position?

The government insists that there is no room for a U-turn and that difficult decisions must be made. In a speech at the TUC conference today, Keir Starmer faced down critics and said that he would not apologise for the changes Labour have made.

In a speech at the TUC Congress today, Sir Keir Starmer said “this election would not have been won if we had not changed”.

“When I say country first, party second that isn’t a slogan it’s the guiding principle… we ran as a changed labour party and we will govern as a changed labour party.

“So I make no apologies for any for the decisions we have had to take to begin the work of change and no apologies to those still stuck in the 1980s who believe that unions and business can only stand at odds leaving working people in the middle.”

Chancellor Rachel Reeves has urged MPs to get behind the changes. She told a meeting of the Parliamentary Labour Party (PLP) in the Commons yesterday night that she was “not immune to the arguments” that many of them had made against the “difficult decision”, and insisted ministers had “considered” them all.

She went on to add it was ‘the right thing to do – to target money, at a time when finances are so stretched, at people who need [it] most.’

Basit Mahmood is editor of Left Foot Forward