Rachel Reeves has attempted to ride out the humiliation of yesterday’s Winter Fuel u-turn by insisting her initial cut was the “right decision”. It came after months of refusing to budge on the cut, which left millions of old people struggling to heat their homes this past Christmas.
Ms Reeves insisted: “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.”
The new policy will mean any retiree with an income of £35,000 or less will be entitled to the £200-a-year, up from the current threshold of just £11,500.
The change is set to cost £1.25 billion, but has now opened the door to demands for the Chancellor to u-turn on other unpopular policies such as the Family Farms tax and the two child benefit cap.
The Treasury insisted that the u-turn would not lead to a “permanent rise in borrowing”, however this was shot down by the Institute for Fiscal Studies.
Director Paul Johnson said: “It wouldn’t even be in the top 100 of things that I would do with my £1.25bn if I wanted to act on poverty.
“Almost none of the people impacted by this will be in poverty. Most of them will be at least as well-off as the average in the population. We know that poverty is much worse among families with children than it is with pensioners.”
He added that the u-turn will mean “permanent additional taxes”.
While Ms Reeves refused to apologise yesterday, she told the Express she “understood” and has “listened to [the] concerns” of voters.
She told this paper: “I think Express readers can see the state of the economy, can see the state of the public finances that this Labour government inherited last year.
“It meant a number of difficult decisions on welfare, on spending and on tax to restore stability to the public finances.”
However opposition parties including the Tories, LibDems and Reform were scathing about Labour’s failure.
Speaking in Port Talbot yesterday, Nigel Farage heaped praise on the Express’s winter fuel crusade.
Holding up a Daily Express front page as he held a press conference in Port Talbot, Wales, he said: “I think we can claim some credit, with this Express headline from last week.
“And well done the Express for splashing it, and I think we have made the political weather on this one.
“There is no doubt in my mind that the government would not have u-turned on this had it not been for the pressure Reform UK is putting on them.”