The new Labour Government’s decision to means-test the Winter Fuel Payment could be scrapped thanks to £10billion windfall awarded to Chancellor Rachel Reeves.
Labour MPs are urging Reeves and Prime Minister Keir Starmer to halt their decision to link the energy bill benefit, which offers up to £300 in support, to Pension Credit from the Department for Work and Pensions (DWP).
The Chancellor has been given more headroom following the Bank of England’s decision to slow the pace of its quantitative easing.
As a result of this decision, the losses from bond sales to the Treasury have been reduced with an extra £10billion now being available to spend.
Rachael Maskell, the Labour MP for York Central, has called on Reeves to pause what is effectively a cut to the Winter Fuel Payment.
Some 10 million pensioners are expected to lose access to the benefit either due to not being eligible for means-tested support or not applying for Pension Credit.
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According to Maskell, revenue generated by means-testing the allowance is only a “tiny proportion” of the windfall that has been handed to the Chancellor.
Labour’s MP for York Central believes the Government must “absolutely” review its decision-making following the recent action from the Bank of England.
Maskell told The Times: “It’s a responsible decision if they have got additional funding. I think there are many demands, but this is most urgent to keep people safe this winter.
“We’ve got to do everything we can to keep people warm. I would welcome the Government delaying so they can properly review this decision and put mitigations in place to keep people safe.”
Despite this, a Treasury source told the Treasury: “The Chancellor has said there will be difficult decisions across tax, welfare and spending at the Budget. Nothing announced today changes that.”
Pensioners are not the only demographic who are likely to be impacted by Reeves’ Autumn Budget on October 30 with rumours of reform to capital gains tax, inheritance tax and pension tax relief.
Furthermore, reports suggest the Chancellor is floating axing the single-person discount on council tax which is worth 25 per cent.
One senior Labour MP sounded the alarm that further cuts to public services and social security will not go down well with the public in the wake of this £10billion windfall.
The anonymous source said: “It’s going to go down extremely badly, not just with Labour colleagues who struggled with these cuts to Winter Fuel Payments, but with our constituents.
“This is not what a Labour government was elected for.”
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The Treasury told The Times: “Decisions regarding quantitative easing and tightening are rightly for the independent Bank of England’s monetary policy committee.
“The overall gains or losses from the asset purchase facility are highly uncertain and predominantly determined by interest rates and gilt prices.
“The Office for Budget Responsibility will make a full assessment at the October budget.”
GB News has contacted the Treasury for comment.
