Exclusive: Government Anticipates Further Election Losses Due to Unpopular Policy and £5bn in Planned Benefit Cuts
Officials at Downing Street are reconsidering their decision to reduce winter fuel payments as concerns mount within senior government ranks that this policy may cause significant electoral setbacks, according to sources speaking to the Guardian.
The leadership team around Keir Starmer has been actively discussing ways to address public dissatisfaction with the policy, which became evident in the recent local elections. During these elections, the party retained only a third of its council seats.
While it is unlikely that the cuts will be completely reversed, sources within Number 10 suggest that there might be adjustments to the £11,500 income threshold above which pensioners do not qualify for the fuel payment.
Labour MPs are exerting pressure on the government to reconsider both the winter fuel payment policy and the proposed £5bn in benefit reductions before the upcoming vote on the initial stage of its welfare strategy in early June.
Officials are planning a second phase of welfare cuts for this autumn, sources informed the Guardian, although there is concern that deeper cuts could exacerbate tensions further with discontented Labour MPs.
Labour party activists have reported that the issue of benefits was frequently brought up by voters during the local elections across England, and it played a significant role in the party’s defeat to Nigel Farage’s Reform UK in the Runcorn and Helsby parliamentary byelection.
Several ministers and high-ranking officials have expressed to the Guardian their belief that last July’s decision to restrict the winter fuel allowance to only the poorest pensioners was a catastrophic error.
A cabinet minister remarked, “It is constantly brought up when we go door-to-door. The winter fuel issue could cost us the next election; it was a grave error. However, it might be too late now for a U-turn.”
This Tuesday, the Welsh First Minister, Eluned Morgan, will deliver a significant speech criticizing the welfare cuts, establishing a clear ideological divide with Welsh Labour, which she will align to the left of the UK party.
Sources within Downing Street acknowledge the widespread concern regarding the policy both within the party and among the electorate, revealing there have been numerous discussions on this topic recently. However, they emphasized that these do not constitute a formal review.
“People are telling us that we haven’t done enough to help them with the cost of living, and the winter fuel cut is a prime example of moving in the wrong direction,” one source stated.
Another source added, “The winter fuel cut has become a symbol of our perceived opposition to working people. We need to demonstrate that this isn’t the case.”
However, they cautioned that there would be no impulsive reactions to the election results, and any policy modification would not occur before autumn, and would be announced as part of a larger financial package.
The percentage of Labour voters who switched to Reform – about 8% – has remained stable since September, they added.
“We need to ensure our response to the elections is appropriate and not merely a knee-jerk reaction to immediate criticisms. Of course, Labour MPs are feeling the impact of discussions about winter fuel during the elections,” one insider from Number 10 commented.
Pressure from MPs for a significant reevaluation of economic strategy is expected to increase in the upcoming days. “It might not be too late,” one MP speculated about a potential U-turn on winter fuel. “We might not earn praise for it, but it could neutralize it as a major point of criticism.”
“The mood among the PLP [parliamentary Labour party] is becoming more resolute against the cuts,” another MP observed. “It’s not just the usual critics who are upset about this.”
In Number 10, there is concern that any modification to the policy could adversely affect Rachel Reeves, who eliminated the payment of up to £300 from 10 million pensioners shortly after assuming office, citing the necessity to address a budget deficit left by the Tories.
One senior official noted that the strong reactions to the winter fuel cut are likely to influence their broader plans for welfare reform, as previously loyal backbenchers are now threatening to oppose the vote on £5bn of cuts expected in early June.
