The winter fuel payment cut returned some money to the government’s coffers at the expense of a group that fared relatively well during the austerity era – but it came at a significant cost. About a million pensioner families who are among the poorest fifth of UK households lost the payment; more than 70% of disabled pensioners were affected. Now, the government is weighing a partial reversal in the hope of mitigating the impact of an attack that remains as forceful today as when the change was made.
“There’s sometimes a moment in politics where you from thinking it’s too late to do something, and you’ve missed the chance, to thinking … actually, you’ve got to do it,” Jessica Elgot said. “It feels as if we’re reaching that tipping point.”
What impact is the government hoping for politically?
If Labour does press ahead with the plan, the calculation will be that the negative coverage for making a partial U-turn will be more than balanced by the removal of one of the cudgels that opponents most like to hit the party with.
“There is a generally accepted view in No 10 that the winter fuel allowance decision was a mistake,” Jessica said. “I don’t know if that is the view in the Treasury. But the feeling is that it shut down the chance to tell a more positive economic story, and became the first thing people associate with a new Labour government.”
All that pain came for relatively little gain: the government hoped it would save about £1.4bn a year, a relatively small slice of the £22bn “black hole” Rachel Reeves accused the Tories of leaving in the public finances. Analysis by the Observer in September suggested that, in the first year, this might have been an overestimate of up to £700m because of a rapid increase in applications before the benefit expired.
“Reform voters are economically leftwing,” Jessica said. “They tend to support nationalising utilities, protecting British companies from foreign ownership, and above all they’re worried about the cost of living because they are often living in precarious circumstances.”
What kind of pressure has the government faced?
In the days since the local election results, the mood among Labour MPs – particularly those who are concerned about a challenge from Reform at the next election – has worsened: not mutinous, quite, but certainly audibly anxious. An intervention by Louise Haigh in yesterday’s Guardian, and in a column in the Times, was the most prominent example of a backbencher voicing reservations about the government’s approach.
Haigh’s cautioning against a “simplistic and naive” lurch to the right was significant partly because of her status as a former – albeit sacked – member of the cabinet. But it also had weight because she hails from the so-called “soft left” of the party, a faction quite distinct from the Corbynite wing and that Starmer would hope to be able to rely on.
“They were the core of Starmer’s support in the leadership election, although Haigh herself supported Lisa Nandy,” Jessica said. “She is speaking in line with the kind of concerns that most in the mainstream of the party have. They don’t like the culture wars stuff, or the immigration language, though they may be able to put up with it. But what they really talk about is the lack of an economic strategy they can sell to voters.
“The mood is not just in the parliamentary Labour party, but in the cabinet as well. It’s not just about the winter fuel allowance – it’s about the sense that they urgently need to start telling a different economic story.” That urgency may not be fully reflected in the fact that if a change does happen, it will come until after the summer.
What other options does Starmer have?
What Labour wanted to talk about this morning was a more modest policy announcement: a promise of 8.3m additional GP appointments this year, paid for from the increase to employers’ national insurance contributions (NICs) in the last budget.
“It’s an attempt to show they’re delivering on one of the classic issues that people feel has a tangible effect in their lives,” Jessica said. “And by linking it to NICs, they’re trying to show that tax rises actually have an impact. That maybe starts to lay the groundwork for further tax rises in the autumn.” The need to link tax increases to tangible benefits may also explain the timing of potential change to the winter fuel payment.
Some in the socially conservative “Blue Labour” faction want the party to double down on its rhetoric and policy on immigration – and the Times reports today that the immigration white paper, due to be published next week, will include new restrictions for visa on countries whose citizens are most likely to overstay and claim asylum.
But there may be a question about how much further to the right Labour can go without alienating even the more moderate members of its coalition, let alone the left. “The danger is that they find themselves in the same place Rishi Sunak did, where you keep saying ‘stop the boats’, but you don’t,” Jessica said. “That is corrosive for trust, and it arguably only hardens the anger against them.”
The government could theoretically reverse course on its controversial cut to incapacity and disability benefits. That looks very unlikely, not least because it’s worth a lot more money. But many Labour MPs say that this is the other big issue that they hear about from voters.
“It causes them the same electoral terror,” Jessica said. “In some Labour constituencies, as many as one in six adults are on Pip, and there are all the people with a family member or friend who rely on it.” The numbers are especially high in constituencies where Reform finished second in 2025.
The really nuclear option would be for Starmer to sack Rachel Reeves – widely seen as the architect of the winter fuel payment policy, and ultimately responsible for Labour’s economic strategy. “That’s another question,” said Jessica. “Nobody in the party is going as far as saying that they can only make progress if she goes.”
Will any of this blunt Reform’s attacks?
One of the great problems for Labour, as for any government, is how to get credit with the voters for the changes it makes. “There’s a lot of polling evidence of how little credit the government gets for things like building new hospitals in local areas – people tend to credit the council or the local community,” Jessica said.
That is partly why the sternest of Starmer’s critics argue that individual policy shifts are not enough to take on the threat from Reform, which is capitalising on a long-term mood of pessimism after years of decline in public services and living standards. Instead, they say, Starmer needs to get on the front foot with a more compelling argument: not just what Labour is doing more effectively, but who it is doing it for – and, by the same token, at whose cost.
“There has been a recognition since Starmer became leader that he needed a big narrative, and he has never quite managed to find one,” Jessica said. “I don’t know how many times it’s been written that he can’t quite articulate his vision. Yes, they won a massive landslide, but there’s an argument that this is why things are so difficult now: because they don’t have that solid base to grow from, a definition of what Starmerism means.”