Talks in No 10 about abandoning the policy have accelerated this week, after focus groups indicated voters would not necessarily bear a grudge against the Government if it performed a partial or full U-turn.
Starmer’s team has been weighing up whether it will suffer further electoral losses from the unpopular policy against the potential political embarrassment of a climb down.
Also being discussed – but extremely unlikely to be agreed – is to reverse the policy altogether.
The move, which did not feature in Labour’s election manifesto, meant around nine million pensioners no longer qualify for the annual grant, worth between £100 and £300.
No decisions have yet been made on when the reversal to the policy could come into effect, with some sources suggesting Chancellor Rachel Reeves could announce the changes as soon as the spending review on 11 June.
Election losses have forced No10’s hand
No 10 is well aware of the strength of public anger at the winter fuel policy. It dominated the feedback candidates received from voters at the local elections earlier this month, which saw Labour lose two-thirds of the council seats it was defending.
The results have led to growing calls to rethink the policy from senior Labour figures, including Welsh First Minister Eluned Morgan.
Nigel Farage is joined on stage by Andrea Jenkins winner of Greater Lincolnshire mayoralty (L) and Sarah Pochin winner of the Runcorn and Helsby by-election (R) as Reform UK celebrate historic local election victories on May 02, 2025 in Paddock Wood, England. The winter fuel policy has been blamed in part for th election losses. (Photo by Lia Toby/Getty Images)
Labour MPs have also criticised the policy since its introduction.
While until now senior members of the Government had resisted a change to the policy on fiscal grounds and because any U-turn would make Starmer look like he’s flip-flopping, their thinking has considerably altered.
Inside No 10, the scales have shifted so that any political and fiscal benefits of keeping the policy in place are now outweighed by the political cost.
More than 100 Labour MPs have signed a letter stating their concerns about the cuts, raising the prospect of a parliamentary defeat for the Government unless it changes course.
Even so, the immediate political cost to changing course is likely to be heavy.
There is also a significant political risk to Reeves’ “iron Chancellor” image if it looks like she has been overruled by No 10 on fiscal policy.
The number of pensioners claiming pension credit which entitles them to the winter fuel allowance has risen. According to an analysis of Department for Work and Pensions figures, in the 16 weeks after the announcement last July the Government received around 150,000 claims, compared with 61,300 in the 16 weeks before.
But the number of rejected claims rose by a huge 96 per cent – from 27,100 to 53,100.
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