Labour Declares War On Pensioners by Abolishing Universal Winter Fuel Payments – What's Next ?

 

Those of us who were suspicious of Labour’s motives before the election will not have been surprised at Rachel Reeve’s first salvo in Labour’s ‘war on pensioners’ in August.

The only thing that was a little unexpected was the belligerence of her delivery…and the readiness with which she was prepared to ‘let the cat out of the bag’ this early in her tenure. The pronounced ‘gasp’ from all sides of the Commons when she announced the move suggested that even her own colleagues were a tad surprised. Subsequent analysis has shown very little evidence of contrition on her part, although Starmer's 'happy band' of new MPs are getting it in the neck via their mailboxes.

It was a virtual certainty that benefits would come under attack following the Tories election defeat. Labour, having successfully hemmed themselves in by their manifesto promise of no increases in NI, VAT or income tax rates, have already agreed several inflation-busting increases in public sector pay. With many more of these in the pipeline and yet to come, they have ensured that substantial additional tax rises and some swingeing public spending cuts are a virtual certainty this autumn. 

Labour justify their tax rises and benefit cuts by blaming the Tories for a poor financial inheritance, despite the recent conflicting evidence that our economy is now growing faster than the rest of the EU. They claim that high wage settlements will save money in the long run by preventing strikes. However, the latest 'cave ins' to ASLEF  and the BMA have attracted much criticism, and not just from the Tories. You can be sure that the other public service sector unions will now apply pressure on Labour as their paymasters,  and will hold out for as much as they can get. Little chance then of a 'strike-free' Autumn and Winter this year.....interestingly, ASLEF, having got the pay increase they wanted, have already found something else to strike about, and will no doubt continue in this vein, as is their wont. The BMA, having secured a 22% payrise over 2 years for their junior doctors, have said that they expect further super-inflationary awards down the line, or else 'there will be consequences'. 

Reeves' announcement in July would appear to be confirmation (if indeed we needed it) that she and Starmer see pensioners as a burden, both on society and the exchequer, and intends to make life as difficult as possible for them financially by removing as much of their income (and wealth!) as she can get away with over the next 5 years. The fact that she aimed her first benefit cut of all at the vast majority of UK's pensioners speaks volumes and shows a cavalier disregard for their interests....

Removing the Winter Fuel Allowance from all but a few of them, effective immediately, was merely the start....and as it turns out, was a rather naive one, which could well seriously backfire. 

The reason for this is that by tying eligibility to existing means-tested benefits such as pension credit, Reeves will effectively cut off everyone above the eligibility threshold, which will include many pensioners reliant solely on the state pension  and still really struggling with the cost of living increases of the past 2 years. The choice between 'heating and eating' is a stark one which faced many of the poorest when the cost of living crisis first hit back in 2022. It is likely to revisit these folks with a vengeance this winter, particularly now that all the additional cost-of-living reliefs of previous years provided by "those profligate Tories" have been scrapped. 

There is a good reason why Reeves has tied eligibility to benefits claimants - it would be much more administratively difficult to link it to a more discriminating (and fairer !) income assessment, since this would involve significant extra work for HMRC. She has already tasked this vastly overstretched organisation with administering means testing for various other benefits, and now chasing tax evaders in an attempt to claw back an extra billion or two. They would probably be completely swamped by additional assessments for the 10 million plus UK pensioners affected, however many new untrained FTEs she were to throw at the department. 

One additional, but largely unforeseen, by-product of the use of a pension credit 'passport' to  unlock other concessions, is that it could encourage some to try to defer any occupational pension income they may have built up, in order to qualify. This could expose them to pension 'sharks' who will no doubt be circling for the pickings.

Charities benefitting the elderly are already clamouring for a re-think on WF payments, and the outcry is increasing by the day. This does not augur well for Labour's continued popularity after their somewhat abortive 'honeymoon', which is now well and truly at an end. Reeves is well on the way to establishing a reputation as 'Starmer's Macchiavellian enforcer' and she may rue the day she declared 'took on the pensioners' if (or is it when ?) her popularity hits the buffers. Her boss, Starmer, as the instigator of means testing, despite promising not to do so when in opposition, is fast becoming one of the most hated politicians in Europe; at 62, he is already entitled to free prescriptions and will qualify for the state pension himself in less than 4 years time; he is already being slated on social media as a 'traitor to his age group'.

The next, and perhaps even more damaging, salvo in Labour's 'war against pensioners' will no doubt come in the Autumn statement. It’s widely predicted that Pension Contribution Tax Relief will be hit hard, if not actually abolished, thus reducing the ability to build up an additional pension for anyone approaching retirement and not wanting to rely exclusively on the meagre state pension in retirement. 

At the very least, Reeves will undo Hunt's last set of reforms on pension tax relief thresholds and entitlement. And this won't just affect the 'richest' pensioners, since it will apply to anyone already paying contributions to a workplace pension, and so will be felt by many workers, both in their pay packets, and in the amount going into their pension pots. What price government incentives to boost pension savings and decrease reliance on the state....

Capital Gains Tax will also almost certainly be increased as another means of 'hitting the rich', and could even start being applied to 'main residence' house sales. Stamp Duty thresholds and rates could also get a hike, thus depressing the very housing market demand Labour is using to justify its over-ambitious 'build or bust' house-building targets.

The biggest hit of all will, I suspect, be on inheritance tax (IHT) – Reeves is likely to lower the IHT threshold (currently £325k) to £200k or even less, and may also raise the headline rate to 50% (currently 40%) into the bargain. She could also abolish taper relief, which currently allows progressive exemption for money put in trust for dependents for up to 7 years prior to death, just to 'show the "rich" who's boss now'. 

I doubt whether even a particularly bullish  Reeves would dare to abolish spouse-to-spouse transfer exemption,  but you never know…if you are lucky enough to have any savings or property left once this government has taken its cut of your earnings, (and introduced its new wealth tax) you might yet find that your wife or husband gets a bill for tax at 40% or even more on their inheritance when you die....happy days ahead indeed for anyone wanting to pass on their hard-earned wealth to their heirs.

Such overt plundering of pensioner wealth will hit not only the individuals themselves but, more to the point, will cut off, or at least severely reduce, their offspring’s inheritance. And it will not just affect 'the rich'....whoever they are nowadays. The current threshold means that any estate with a property worth more than £325k is immediately liable for IHT of 40% of its value on death. Where, as is often the case, the value of the property is the estate's main financial asset, this can, and often does, force rushed sales by the bereaved beneficiaries to pay off HMRC’s demand, which becomes payable straight away. Few family houses sell for much less than £325k nowadays, particularly in London and the home counties.

But the main reason that IHT is such a hated tax is that – it ‘steals’ much of the money we have carefully accumulated over a lifetime to help our offspring in their middle years after we die, and does so at the worst possible time when our relatives are still grieving their loss. 

Changes to both IHT and Capital Gains Tax could also have more profound negative effects on the UK economy than a naive government may have anticipated, particularly if Reeves goes for the more extreme ends of the predictions spectrum. As we saw in June 2022, market reaction is all - as Confucius himself might have said, "...those who tamper with the financial 'status quo' have only themselves to blame..". 

I'll be looking in more detail at possible consequences of this in a future article.

Despite Labour's (and Reeves' own) protestations to the contrary, don't rule out an increase on the overall income tax (IT) take either...Labour have carefully avoided committing themselves to anything about IT thresholds - these could still be substantially reduced in the autumn statement without actually breaking manifesto commitments. A reduction of the 40% threshold from the current £50k to £40k or even £30k would bring an even larger proportion of middle-earner salaries into the higher tax band..and would be 'a nice little earner' for the exchequer. 'Middle England' beware.....Rachel is coming for You.

Reeves may well ‘reap the whirlwind’ of dissent over her stance on pensioner's income, and sooner rather than later, given that the over 50s still hold ca 80% of the country’s wealth, and will not take kindly to having it 'stolen' from them, as they will see it. 

Perhaps more to the point, there were over 11 million pensioners in UK at the 2021 census (i.e. 18.6% of the population), 10 million of whom have just lost their winter fuel payment. The number is growing all the time as the ageing process takes its toll. We are thus a force to be reckoned with electorally, and we have long memories when it comes to adverse policies....and vote accordingly. Starmer may well be banking on getting the worst of his 'Austerity2.0' measures out of the way early in his first term, such that everything is forgotten by 2029...I suspect the really hard winter to come, with more concession losses to follow, will ingrain the memory indelibly. Pray God it will at least be another mild one weather-wise...

It’s also a well-known psychological fact that adverse reaction to a change is strongest when an individual or group has something taken away that was originally given to them by a previous government and which they have come to rely on. The fact that it was the Blair government that introduced the Winter Fuel Payment following its own landslide in 1997, will not help him either.

What else might Reeves and Starmer take away from Pensioners ?

Bus Passes

At first sight, the concessionary bus pass is an obvious target – it does, however, present more of a logistical problem for government attack, since:

a) It was introduced by New Labour in true socialist vein and was designed to benefit all our senior citizens and give them much needed mobility in their dotage as a reward for services rendered throughout their working lives. It has been well received and valued by many since it was made available in the noughties, and was one of the lasting legacies the Blair government left us with. Removing it from everyone except means-tested benefit claimants therefore carries a severe public relations 'health warning' for the offending chancellor, and the PM who sanctions it, given their party's (nominally!) socialist ideology. A major back-bench revolt amongst left-leaning MPs would be a virtual certainty, given the storm winter fuel abolition has already kicked up across the nation.

b) Many pensioners now rely on their bus passes exclusively for their day-to-day mobility, since they are no longer able or willing to drive themselves – removing it would severely curtail their activities, with consequences for their mobility and mental health, and more strain on the NHS. This would, quite rightly, cause an outcry - and probably of quite epic proportions, and any government seen to have caused it would be severely wounded electorally.

c) The benefit is Local Authority (LA)-funded and organised and any changes would also require amendment of the relevant sections of the Transport Act 2000 and the Concessionary Bus Travel Act 2007 acts of Parliament – applying a means test across the board for every existing and new pass-holder would create a major administrative headache for every LA, and would thus be likely to cost more than it saved.  Unlike the winter Fuel payment, bus travel is limited to a relatively small number of less well-off pensioners who cannot afford cars or to those who have for various reasons no longer drive, thus reducing even further the revenue gained to the treasury by means testing. Many of our LAs are now Labour-controlled and would be likely to kick up a major fuss with national government if they attempted to enforce abolition of the benefit by reducing the overall LA grant even further - a recent LA association report indicated that the government contribution already falls short of the cost of provision. This is the only means available to central government to curtail the scheme, given that funding for the concession is not provided separately. 

Government would also 'take the blame' as the withdrawing authority, and would suffer at the ballot box in 2029, as would Labour-controlled LAs at the much earlier opportunities provided by the biennial local elections. According to the DOT's own annual report, the cost to the treasury of funding the English concession in 2023-24 was quoted as £1.22Bn. This is substantially less than the cost of the Winter Fuel allowance. The effect on the mental health of the many elderly who could no longer afford to travel beyond their own local area would doubtless apply even more pressure to our failing NHS. Given that a second attack on our most vulnerable demographic in as many months would probably add a final nail in the coffin of this government's prospects for re-election, I suspect they may think twice about means testing on the basis of Pension Credit eligibility.

Remaining Tory-controlled LAs are already poised for a fight with Starmer's government, and were  expecting this clampdown on benefits, and LA funding generally. What's different this time round is that some of the more left-leaning Labour and LibDem-controlled LAs are also starting to realise that their new 'masters' in Downing Street are not perhaps as beneficent and 'socially conscious' as their party traditions would suggest. They are also squaring up for a fight...and not just on pensioner benefits either. 

Since bus concessions are also a devolved matter, there would also be an issue with perceived fairness if Reeves removed the  concession in England, while the devolved governments in Scotland, Wales and NI continued to retain it. Given Reeves’ almost fanatical desire to balance the books, though, we shouldn’t assume it won’t become a target of Austerity2.0 in England at some stage. Scotland may also be at risk, given the parless state of the SNP government's finances.

Last but not least, any future adverse judgement meted out by the courts to the government in response to the current legal challenge regarding the introduction of WF means testing would almost certainly be applicable to the other universal pensioner benefits....

Free prescriptions

Currently, everyone over 60 and entitled to UK NHS care is still exempt from NHS prescription charges. This concession costs the NHS quite a bit - withdrawing the benefit could net up to 6 Billion for the treasury, so the benefit might well be an attractive target. The problem is that many of our over 60s are, sadly, increasingly unhealthy and many now depend on regular medication to preserve their quality of life....or even just to keep them alive at all. Charging them £9.90 for each and every item would force many into doing without - with dire consequences for the medical profession - and whoever had caused the problem. The effect of having to restrict or even stop their medication and the consequent increase in emergency admissions would also be likely to hit the front line of the NHS hard.

The Sunak government's response to the consultation on aligning the prescription charge waiver entitlement with the pension age issued in 2023 does provide some hope. At the time, a change in entitlement was rejected on a number of grounds, and there was never any question of means testing being introduced by the last government. Given the attitude of the new regime to the whole principle of pensioner benefits, however, we cannot assume the prescription charges concession will not also become a target.

State Pension: Triple Lock

This feature of our state pension provision which was introduced by the Tories, was designed to ensure pensioners were not left behind in the scramble for pay awards. This was reasonable, given they don't have a 'union' as such to argue their case. However, there was some griping amongst the working population about it during the 'Austerity 1.0' years. 

Pensioners were accused of being 'feather bedded' by receiving an automatic annual rise of at least 2.5%, whilst workers were limited to increases of 1-2%. However, it quickly becomes obvious that this wasn't justified. When you consider the fact that our UK state pension provision is one of the poorest in Europe (see link for  some quite revealing comparisons of healthcare and pension statistics in UK and our nearest EU neighbours), the triple lock seems eminently reasonable as a way of ensuring the pension does not fall even further behind workers' pay at a time when double digit public sector pay awards seem to be the norm. Despite the recent somewhat hasty release of treasury predictions for an above inflation pension increase in April 2025, I would not be at all surprised to see the triple lock 'go out of the window' altogether in the autumn statement as yet another revenue-raising measure. Be prepared for the announcement of a less generous increase next April, or perhaps even a complete freeze.

What about means-testing the State Pension itself ?

While I don’t this is a realistic prospect just yet, it may be considered if finances get really tight and the much vaunted economic growth Labour have promised to rescue the economy actually stalls as a result of Reeves’ Austerity 2.0 cuts and tax increases on middle England and 'the rich'. It is certainly feasible, although it would be against the recommendations of the IFS Pensions Review. 

Any government, however new and inexperienced, must recognise that, to secure foreign investment (likely to be the only feasible source for growth), the fiscal environment must remain favourable, particularly for incoming entrepreneurs. The prospect of this is poor, to say the least, with large hikes expected in CGT and permanent abolition of non-Dom status already mooted. There has already been a marked uptick in queries about relocation away from UK from some of our better-off pensioners, not just the millionaire entrepreneurs that already make a contribution to our national wealth. This has been due largely to Reeves' threats about tax rises in the October budget statement.  If Reeves makes the UK tax environment too unfriendly, wealth and entrepreneurial talent will simply disappear from our shores, and, more to the point, won't be likely to return.  

From an administrative point of view, DWP could quite easily start means testing state pension provision, and exclude anyone with income above a certain level, or easier still, confine it to those receiving means tested benefits, as they will now have to do with the Winter Fuel Payments. This would, of course, be a disaster for the government. Here's why:

We have all effectively paid for our state pensions and healthcare through our lifelong  and compulsory National Insurance (NI) contributions. This is what NI was set up by Bevan in the late 1940s to do, and the scheme is enshrined in a web of complex legislation. Although historical fact may not cut much ice with this particular chancellor,  the illegality of denying benefits to an individual or group that have already been nominally paid for certainly should. Restricting pension entitlement according to means would leave government acutely vulnerable to legal challenges, assuming they were stupid enough to try it in the first place. I suspect Starmer, as a former DPP, must realise this....

Single-person Council Tax 25% discount

Although this benefit is not of course confined to pensioners, its loss would affect the over 70s disproportionately, with around half of those receiving the benefit being of pensionable age. This is because the ageing process takes its inevitable toll on couples, with one partner (usually the male) dying first and leaving the other to a single existence for however long they survive. The discount is a substantial benefit, given that the average band D council tax bill is now over £2000 p.a., and set to rise by at least 5% annually to cover cash-strapped LA budgets. Withdrawal of the discount would thus increase the bill by around £500 p.a. - sufficient to force a recently bereaved pensioner dependent on the state pension to sell up, with the trauma and stress that would cause. As in the case of concessionary travel, there may be some protection in that the tax is LA-controlled, and not the direct remit of the government, but I wouldn't assume this will save it from stringent means-testing in future. Abolishing the discount, or even linking it to Pension credit, could save up to £3Bn - another 'nice little earner' to fund all those pay increases....

What are the ongoing risks for Labour ?

One important but perhaps less obvious, reason why this now obvious 'anti-pensioner' political strategy, (which is clearly aimed at paying the whole demographic en bloc back for their traditional support to the Tories), is a dangerous one for the current Labour administration, is the existential risk it presents for the regime itself. Starmer may think that, with a majority of 170+ in Parliament, he is 'safe' for the next 5 years whatever he does, and perhaps for even longer if the Tories fail to rehabilitate properly, but this is decidedly not the case. Why ? 

As discussed in a previous blog, Momentum, the Unions, and their left wing sympathisers in the party, are waiting in the wings, and are poised to attack whenever things start to wrong for Starmer, who they regard as weak, and far too centre-left to fit in with their ideologies. He will already have confirmed their suspicions already, and a recent post highlighting their position on the WFP changes is particularly revealing. Starmer has spent the last 5 years trying to eradicate Momentum and the 'hard left' from the party, and is therefore universally hated by the group, and regarded as 'public enemy #1' by the hardliners. There are already hints that the new Westminster Labour MP 'tribe' may already be fragmenting into different factions, as is to be expected with such a diverse ideological mix, with its recent history of internal strife. Sue Grey's whirlwind tenure as chief of staff and ignominous replacement last week is symptomatic of a dysfunctional #10 organisation, reminiscent of 'rats in a sack'.  

The left will therefore be watching closely, and any hint of weakness, unpopularity, or resistance to union pay demands,  could trigger a coup within the burgeoning ranks of back-benchers, who we know already contain many left wing ‘sympathisers’ ready to rebel. The ‘magnificent seven’ Corbynite MPs, as some are calling them, who were the first to show their hand over child allowances, and were subsequently expelled with a flourish from the party for 6 months in July by the whips. They are probably just the tip of the iceberg. They will no doubt return to help ‘rally the troops’ after their exclusion time is up, whenever the moment is right. (See also the recent update to the blog on Election 24 for more analysis, and this week's surprise resignation and damning criticism of Starmer's leadership by Rosie Duffield). The not-so-covert 'rebellion' of 50 or more MPs in the Commons vote on Winter Fuel eligibility would tend to indicate a marked, and more extensive, unease with the 'party line'.

What can we do about it ?

The next few months should clarify how bad it’s likely to get for pensioners…and their heirs. In the meantime there’s very little we can do politically as individuals. Why ?

In practice, our ingrained First Past the Post (FPP) voting system means that it's only the Tories who are likely to be a large enough force to be capable of wresting power from Labour in the foreseeable future. They have taken a severe knock, and will be unlikely to be in a position do so before 2029, probably even later. Even one 5-year term with an out of control and effectively un-challengeable government is a long time in politics, and much can, and probably will, go wrong for those in power (and us !) in that time. 

Those pensioners and their relatives who deserted the Tories on July 4th (and I don’t for a minute blame them, given the rank incompetence and chaotic nature of the Truss and Sunak governments following the ousting of Boris) should reflect carefully on their voting intentions when they next get the chance to vote. The Election 24 results prove that it was their withdrawal of their support for the Tories, rather than any real increase in Labour's overall vote, or indeed their popularity, that gave us the current unchallengeable and vindictive government, and we all need to be 'careful what we wish for' in future. 

We should also remember that more than two-thirds of the UK electorate voted against Labour in July, so they were by no means 'the people's choice', as the final MP tally (and their rhetoric!) might suggest. 

Starmer promised on the steps of number 10 on July 5th that he intended to govern for those who didn't vote for him, not just those who did - a brave promise indeed, but let's see if he is resolute enough to honour it by keeping his apparent prejudice against pensioners - and his chancellor - under proper control. This will be the only way he can redeem himself and keep his country united.

What should we do now on a practical level ?

Any pensioner, or indeed anyone within 10 years or so of retirement, who is dissatisfied with things as they are, or more to the point, with what is likely to come this Autumn and beyond, always has the option of writing to (or e-mailing) their MP. That is, after all, the prime reason why MPs are elected...to represent their constituents in Parliament. If enough of us fill our MP's postbox with protests, the message will continue to filter back to Central Office, and something may eventually get done. The best time to do this will be immediately following the Autumn Statement, when the major Austerity2.0 'hits' to pensioner and other benefits have been revealed in all their glory. It's important to keep up the pressure, so we should all keep registering our concern over benefit changes at every opportunity.

As discussed above, Age Concern and other charities have already come out against the abolition of universal Winter Fuel Payments, and many other objections will likely follow, Arguably, major damage to Labour's level of trust amongst the pensioner generation and their relatives has already been done, and Labour will need to take heed if they wish to retain any credibility at all with our senior citizens in future. The honeymoon is now officially over, and we are all watching like hawks.....

The first opportunity to influence policy we get at the ballot box will be next year’s local elections – a strong showing against Labour councillors at this point would send a decisive message to Reeves and Starmer that all was not well with their policies.

There are also a number of online petitions available to subscribe to - I would encourage anyone unhappy with the situation to subscribe to as many of these as possible.

In the meantime, there are things we can do financially to ease the burden on our own pockets, and to encourage a particularly rapacious chancellor and her PM think again. 

Firstly, if you are lucky enough to have any savings left, make sure you have used up your full tax-free ISA entitlement this year - you can save up to £20k per annum tax-free, either as a cash ISA or a shares-linked one. You'll recoup 20% of your interest from Day 1 if you're a basic rate taxpayer, and 40% if you're unlucky enough to have been drawn into the higher rate band by Sunak's iniquitous 5-year threshold freeze (which Labour are retaining - surprise, surprise!).

You can also invest up to £50k in NS&I's Premium Bonds. Although you aren't guaranteed  to win anything, the prize allocation is designed to provide a regular monthly  income which is competitive with the best instant access savings accounts. Since all prizes are tax-free this is an option well worth considering if, like many, you've been dragged into the 40% tax band recently and want to protect a bit more of your income.

If you are really fortunate, and still have substantial assets over the current £325k IHT limit, and you don't want your dependents to lose a large chunk of their value when you die, think about setting up a trust for them. You can also give each of them up to £3k each tax year as a gift, and this is not taxable. As discussed elsewhere, IHT is likely to be one of the taxes to take the brunt of any increases in October, so be quick, in case Reeves decides to abolish the current taper relief system.

Those pensioners who have continued working to supplement their state and occupational pensions, but who perhaps could do without the extra income for a bit, could also usefully consider stopping work temporarily, or switching to voluntary work. By doing this you would (quite legitimately!) deprive the treasury of the extra tax which you would otherwise have paid on your income, possibly at the 40% rate. If you have a money purchase pension pot, there are schemes available which offer a guaranteed payout at the end of  a set term without taking any monthly income. With current interest rates still at 5%, these provide a welcome tax-free bonus at the end of the term which you can then re-invest in another pension product and/or start taking income from when a more favourable tax regime applies.

Last but not least, if you're on a low income, and haven't yet thought about claiming pension credit, please check whether you might be entitled to it. Pension credit is one of the least well-claimed benefits, with a whopping 37% of those entitled to it not actually claiming it last year. DWP won't invite you to claim (for obvious reasons!), so you'll need to make an application yourself. Citizens Advice or Age Concern will help if you're unsure how to check your elegibilty. DWP claim they are now actively trying to identify anyone who is entitled but hasn't claimed, on instructions from Starmer. This is to try and counter the many and somewhat unexpected claims in the media of cruelty to the poorest elderly caused by withdrawing their Winter Fuel payments. My guess is that they will fail to make much impression, given the complexity of applying (a 230-question form is just the start), and the natural pride of many of the wartime generation now in their '80s in not wanting to 'sponge off the state' as they see it. Reeves will be hoping that few, if any, claim - if even half of them did, it would open the gates to thousands of pounds in extra benefits to each successful applicant, and virtually eliminate the estimated £2Bn in savings Reeves is hoping to make by restricting Winter Fuel Payments.

Don't let Reeves' money-grabbing treasury off the hook - there's no shame in taking state benefits that you're still entitled to, since you'll already have paid for them out of your taxes and NI contributions throughout your working life. Claim what you're due, unlock all those additional means-tested benefits that Reeves will no doubt be withdrawing from the rest of us shortly...and make her treasury pay !

To be continued …watch this space for updates.

-----------------------

Update 28.8.24: Starmer's 'unity' speech in the rose garden of #10 yesterday will have done little to reassure 'his' pensioners - quite the reverse, in fact. Its 'doom and gloom' message (i.e. "things can only get worse") is more likely to prime the 10 million who don't possess the 'magic passport' of eligibility for pension credit, to expect even worse targeting to come. 

The contrast with Blair's catch phrase after the 1997 landslide won't have escaped the notice of his electorate, and blaming the Tories for everything will only have currency for so long. Taking the long view, I think what we're seeing is the early flailings of a naive administration desperate to solve all our perceived ills, but having little insight as to how to do it without alienating their electorate. I can't help drawing a parallel with Truss's brief dalliance with power in 2022, which showed the same degree of ignorance combined with unfettered obduracy. We can only hope that we can avoid a similar catastrophic outcome this time round, and that in the words of that immortal New Labour hymn of the 90s "things can only get better "...eventually. At this stage, I can't really claim to have much optimism, though....

Update 9.9.24: Opposition and Legal Challenges

There has been widespread opposition to the proposed changes to winter fuel payments since their announcement in August. Many new Labour MPs are set to rebel, if only in the form of an abstention, when the vote is held in parliament this week. Interestingly, two of the major unions recently came out openly against the change, one of which has actually threatened industrial action. Even Mike Lynch of the RMT has now gone on the record as saying he disagrees with the policy. Thus the predictions of 'trouble at t' mill' for Labour over pensioner benefit cuts may already be showing signs of coming true. Against this somewhat turbulent backdrop, the leadership do still appear to be (somewhat frantically) holding firm - Starmer warns us daily of worse yet to come. Further 'interference' with the leadership team's  wishes is expected in the form of legal challenges. A motion has already been tabled in the Lords to annul the new regulations, and it remains to be seen whether the original statute, The Social Fund Winter Fuel Payment Regulations 2000, and any subsequent changes made to it, entitle the government to change the eligibility to a universal benefit without full consultation.

The apparent naivety of the move from a financial point of view is becoming ever more apparent. DWP, no doubt on the instructions of their new masters in Downing Street, have hastily put out a plea to anyone not claiming universal credit to seek advice on whether they may be eligible. We know from their own figures that ca 880,000 not already claiming may be entitled, and that a successful new claimant is likely to fall heir to several thousand pounds extra p.a., including the winter fuel allowance itself. If even half of these potential claims were to be made and hit the treasury at once, it would dwarf the estimated £2Bn in savings on this November's winter fuel payout. Reeves must have been aware of this from the start, and be relying on the fact that most won't claim, so we can only conclude that she and Starmer are doing it on principle, i.e. to curry favour with workers at the expense of pensioners...and punish the elderly for supporting the Tories. A cruel twist to the DWP's 'pill-sweetening' intervention is the fact that the cutoff for pension credit eligibility lies just below the new full state pension. This is designed to ensure as few as possible are eligible, and merely 'rubs salt into the wound' for many of the most financially challenged pensioners, who may have been given some hope of avoiding the 'heat or eat' challenge this winter by the DWP's announcement.

This government is rapidly showing its true colours as a mean-minded and obdurate regime with strong autocratic tendencies. We can no longer trust any of their election promises, and should beware of any assurances they may make about our benefits for the future.

Given our abhorrence as a nation of unfairness, particularly when it comes to our most vulnerable demographic, they will have a fight on their hands...and evidently not just from their pensioners. If they pursue their present course, they can expect increasing unpopularity, and some nasty shocks for their party at the ballot-box, starting next May.

The signs do not augur well for Labour - a valuable early indicator of electorate reaction is the local council by-election statistics. Since May, Labour have suffered a net loss of 18 seats, with 13 of them taken by the Conservatives, and the rest going to the minor parties (see table below). The Lib Dems, who profited handsomely from the Tories unpopularity in July, and have been revelling in their success ever since, have lost one.

Woe betide Labour if they try abolishing anything else in the meantime!

First published 30.7.24

Revised 5.11.24