On 29 July, just three weeks after Labour’s landslide win, Rachel Reeves made her first political mistake. And it was a biggie.
She announced that households in England and Wales would no longer be entitled to the Winter Fuel Payment unless they receive Pension Credit or certain other means-tested benefits.
At a stroke, she stripped 10 million pensioners of up to £300 in support for gas and electricity bills.
While some recipients are comfortably off and won’t feel the loss, around two million sit just above the threshold for help and definitely will.
For them, it was a bitter blow. And millions still haven’t forgiven her.
The Winter Fuel Payment cut was only the beginning. Her £40billion Budget tax raid and the £5billion disability benefit squeeze in March have further fuelled anger.
Along with immigration, these policies have been blamed for Labour’s ballot box meltdown last Thursday.
For furious MPs and activists, the Winter Fuel Payment cut is symbolic of a government that lost its way from day one.
Now Reeves is being urged to reverse course.
Doncaster mayor Ros Jones, who held on by just 698 votes ahead of Reform, said: “The Prime Minister must start listening to those calling for a U-turn on cuts to Winter Fuel Payments and disability benefits.”
Leeds East MP Richard Burgon added: “By pushing policies like cuts to disability benefits and scrapping the Winter Fuel Allowance, the leadership is driving away our own voters and letting Reform squeeze through.”
Corbynities including former shadow home Secretary Diane Abbott and shadow chancellor John McDonnell have also railed at the Winter Fuel Payment cut, along with the £25billion employer’s NI hike on jobs and threats to disability benefits such as the Personal Independence Payment, or PIP.
Unite leader Sharon Graham has previously called the Winter Fuel Payment axe “a disgraceful betrayal of older voters”.
They don’t just want it restored for the hard up, but for every pensioner to shore up voter support for Labour.
Until now, Starmer and Reeves could afford to ignore Labour’s left flank. After last week, it can’t.
So will Reeves climb down?
Scrapping the Winter Fuel Payment saved the Treasury just £1.5billion. That’s a rounding error against our £150billion annual deficit.
Yet Reeves will be reluctant to change course.
Politicians hate being accused of U-turns. Giving in would be seen as a loss of authority, proof she’s now at the mercy of her critics.
As I wrote yesterday, Labour is boxed in. It daren’t raise taxes, daren’t cut benefits and daren’t borrow more.
This puts Reeves in an impossible position. If she holds firm, Labour bleeds votes. If she caves in, Britain risks slipping even deeper into financial trouble.
Restoring the Winter Fuel Payment is one of the few retreats the bond markets could tolerate.
The question is whether Reeves can stomach the climbdown. Millions of shivering pensioners won’t care. They just want their payment restored.
