Chancellor Rachel Reeves hinted on Tuesday that the unpopular measure would be partially-reversed, and it comes after The i Paper exclusively revealed on Saturday that Starmer was poised to annoucne a U-turn.
It is understood agreement to back track was made some weeks ago with discussions centering on whether to scrap the policy completely, or finesse it to ensure more pensioners would be able to claim the payment.
However, the policy has been hugely unpopular and was widely blamed for the party’s collapse in support in the local elections earlier this month.
“I recognise that people are still feeling the pressure of the cost-of-living crisis, including pensioners,” he said.
He said the Government will “only make decisions we can afford” and would therefore look at this as part of a “fiscal event” – signalling that a change will be announced either at the spending review in June, or the Budget in the autumn.
Former Prime Minister Gordon Brown said the change should be made as soon as possible.
A second source also said that Downing Street had been “unhappy for a while” and that Reeves had come round to the need to change course “a few weeks ago”.
She hinted at a shift in thinking on Monday when she said she was “listening” to concerns “about the level at which the winter fuel payment is removed”.
Rachel Reeves, UK chancellor of the exchequer, during a business reception on the sidelines of the UK-EU summit, at Downing Street on Monday. Photographer: Tolga Akmen/EPA/Bloomberg via Getty ImagesThe Spokesman reiterated a previous commitment that Reeves will remain Chancellor until the end of the Parliament.
A government source said that unless Starmer did a “full 180” by completely reinstating the payments, it would just “dredge up” the controversy without satisfying people’s concerns.
Labour MPs call for full reinstatement
Jon Trickett, the MP for Normanton and Hemsworth, said: “The Winter Fuel cuts were a major error. They ought to be reversed in total now”, while Clive Lewis, the MP for Norwich South, said the partial U-turn would not “atone politically for the original decision, and I still want to see the principle of universality restored”.
It is not clear what mechanism the Government will use to reverse the decision, where the new eligibility will be set or even whether it will be in place for this winter.
The Treasury has been approached for comment.
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