The business secretary has stated that the economy needs to be “strong enough” for the government to reverse the cuts to winter fuel payments.
Jonathan Reynolds, speaking with Beth Rigby on the Electoral Dysfunction podcast, mentioned that the public will have to “wait for the actual budget” for any official announcement regarding this issue.
You can catch the full interview in tomorrow’s episode of the Electoral Dysfunction podcast.
On Wednesday, Sir Keir Starmer announced his intention to reinstate the winter fuel payment, which has been discontinued for over 10 million pensioners this winter due to means-testing.
He and his team maintained their position on the policy until Sir Keir disclosed his shift at Prime Minister’s Questions just hours later.
However, Mr. Reynolds indicated that several factors would influence any potential policy change.
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Winter fuel payment cuts to be reversed
“The economy must be robust enough to empower us to make the decisions that people expect from us,” he emphasized.
“We want the public to know we are attentive to their concerns.”
“The prime minister has assured that he is listening and is aware of the situation.
“He aims for a strong economy to deliver for the populace.
“You’ll need to wait for the actual budget for that.”
Read more:
Gordon Brown proposes excluding high earners from winter fuel payments
What options exist for winter fuel payments?
- The Institute for Fiscal Studies has examined the government’s alternatives following Sir Keir Starmer’s indication of potential changes to the winter fuel payment cuts.
- The government could entirely reverse the decision to remove payments from pensioners who don’t claim pension credit, reinstating the payments for all.
- An increased eligibility threshold could be implemented, allowing households not claiming pension credit to directly apply for winter fuel payments by disclosing their income and circumstances.
- Alternatively, all pensioner households might claim it, with those above a certain income level completing a self-assessment tax return to return a portion as a higher income tax charge, similar to the child benefit system.
- Rather than withdrawing pension credit at a full pound-to-pound rate for every pound of income, the withdrawal could occur more gradually, allowing more households to benefit and thereby receiving winter fuel payments.
- Currently, winter fuel payments are allocated to households, but if distributed to individuals, the government could means-test pensioners individually based on their income, which is already tracked for tax purposes. This provision would allow low-income individuals to receive payments, even if their partner has a high income, effectively doubling benefits for low-income couples.
- The government could extend eligibility for winter fuel payments to pensioners claiming means-tested welfare for housing or council tax support, potentially benefiting 430,000 renting households at an estimated cost of £100 million annually.
- Pensioners who do not claim pension credit but receive disability credits could also be eligible for winter fuel payments, potentially encompassing 1.8 million households in England and Scotland at a cost of approximately £500 million per year.
- Pensioners residing in band A-C properties could be automatically entitled to winter fuel payments, which would affect over half (6.3 million) of them.
Chancellor Rachel Reeves has pledged to maintain only one major fiscal event annually, meaning there will be just one budget each autumn.
Typically, autumn budgets occur in October, with the last taking place at the month’s end.
If this year’s budget aligns with the same timeframe, it may leave insufficient time for the additional winter fuel payments, which are distributed between November and December.
