Labour told 150K pensioners would fall into poverty when Rachel Reeves cut Winter Fuel Payment
The government knew that 150,000 pensioners would be pushed into poverty when it cut the Winter Fuel Payment, Liz Kendall has said.
Chancellor Rachel Reeves limited access to the benefit, worth up to £300 in a cost-saving measure as she sought to repair the nation’s finances.
The payment is being restricted to only those claiming pension credit from this winter, with the aim of saving the public purse £1.5 billion a year.
Work and Pensions Secretary Ms Kendall revealed the Government’s assessment of the impact in a letter to MPs, but stressed the figures did not take into account plans to increase the numbers on pension credit.
It said that when Ms Reeves made the decision to cut back the Winter Fuel Payment in July, Whitehall estimated 100,000 pensioners would be pushed into relative poverty after housing costs in 2025-26.
On top of this, 50,000 people would be pushed into absolute poverty.
However, Ms Kendall wrote “this modelling has since been updated to incorporate more up-to-date Office for Budget Responsibility” economic assumptions, which just found 50,000 pensioners would be left in relative poverty.
Households in relative poverty have less than 60 per cent of average income in the current year.
Ms Kendall said the Labour Government had been “forced” to limit the payment due to the “£22 billion black hole” it blamed the Conservatives for leaving behind.
Despite the official modelling, Sir Keir Starner insisted elderly Britons would still be “better off” due to the increase in the state pension in April.
This comes as inflation jumped to 2.3 per cent yesterday, the sharpest rise for more than two years.
This was higher than economists expected, and has been driven by an increase in household energy bills.
The significant rebound, which could increase pressure on the Bank of England to delay cuts to interest rates, comes after CPI inflation had dropped to a three-year-low in September.
Jan Shortt, National Pensioners’ Convention general secretary said: “Will the Chancellor now reconsider her decision and reinstate the Winter Fuel Payment to all pensioners this year - or will she take responsibility for the risk to the health and welfare of those struggling to survive the cold without the allowance?
“Given that we already have freezing weather across the country, it is inevitable that those without the support of the Winter Fuel Payment will be suffering in cold homes – many afraid to turn the heating on at all.”