Rachel Reeves tells Labour she is 'not immune' to concerns over winter fuel allowance plans
The chancellor Rachel Reeves told a meeting of the Parliamentary Labour Party on Monday evening that she is “not immune” to concerns over plans to dramatically scale back the winter fuel allowance.
She said: “I understand the decision that this Government have made on winter fuel is a difficult decision. I’m not immune to the arguments that many in this room have made. We considered those when the decision was made.
Reeves pointed to the rise by £900 of the new state pension compared to a year ago.
“Tomorrow, we get data for earnings growth, which will inform the increase in the pension next year. We are protecting the triple lock, not just for this year, but for the duration of this Parliament.”
Reeves said there would be “more difficult decisions to come.”
“I don’t say that because I relish it. I don’t, but it is a reflection of the inheritance that we face. So, when members are looking at where to apportion blame, when pensioners are looking where to apportion blame, I tell you where the blame lies.
“It lies with the Conservatives and the reckless decisions that they made.”
The chancellor Rachel Reeves told a meeting of the Parliamentary Labour Party on Monday that she is “not immune” to concerns over plans to dramatically scale back the winter fuel allowance. She said: “I understand the decision that this Government have made on winter fuel is a difficult decision. I’m not immune to the arguments that many in this room have made. We considered those when the decision was made.” She pointed to the rise by £900 of the new state pension compared to a year ago. Reeves said: “Tomorrow, we get data for earnings growth, which will inform the increase in the pension next year. We are protecting the triple lock, not just for this year, but for the duration of this Parliament.” Reeves said there would be “more difficult decisions to come.” After the meeting, a spokesperson for the chancellor said MPs showed “strong support” for the plan.
Local transport authorities across England will be able to run and control bus services under a Labour overhaul designed to “save vital routes”, Simon Lightwood, the transport minister, told MPs in a Commons statement.
Government plans to introduce VAT on private school fees also came under fire during education questions, with Tory MPs warning of a looming capacity crisis in the state sector as a result of the tax hike. Shadow education secretary Damian Hinds warned of bigger class sizes and a shortage of school places, as a result of parents pulling their children out of the independent sector to avoid the additional fees. Education minister Stephen Morgan said the number of children in private schools has remained steady, despite a 20% real terms increase in average private school fees since 2010 and a rise of 55% since 2003. He said his department would be monitoring occupancy and would work with local authorities to help them fulfil their duty to secure places.
The previous government’s legislation on freedom of speech may have facilitated “hate speech including Holocaust denial” to spread on university campuses, Bridget Phillipson, the education secretary, told MPs. Phillipson has paused the Higher Education (Freedom of Speech) Act 2023 to consider other options including its potential repeal.
Wes Streeting rubbished the Conservative party’s record on health as he responded to Commons questions about his decision to take advice from his Labour predecessor Alan Milburn. In response to an urgent question tabled by Victoria Atkins, the shadow health secretary, Streeting strongly defended his decision to invite Milburn to meetings, he said: “Unlike our predecessors, this is a government that can’t get enough of experts.” Streeting said that when he became health secretary, replacing Atkins, he was confronted with the “worst crisis in the history of the NHS”, including waiting lists at 7.6m, more than a million patients per month waiting more than four weeks for a GP appointment, junior doctors still threatening strike action and NHS dentist appointments impossible to find.
My colleague Jessica Elgot on the state of play following the Labour meeting.
MPs leaving the meeting believe v few - if any - will vote against the government on winter fuel payments - but some will find themselves absent on constituency business.
Prolonged cheering and clapping for Reeves at the end of the meeting…
Wes Streeting said “nothing commercially sensitive” has been shared with a former health secretary who has attended Department of Health meetings, despite having no official role.
The health secretary defended his decision to invite one of his Labour predecessors, Alan Milburn, into the department, amid Conservative allegations of “cronyism” from the new Government.
Streeting, in a rowdy Commons chamber, said he decides who to hear from in meetings, whose advice he seeks and what to share with them.
The Cabinet minister accused the Conservatives of seeking to “smear” Milburn, who he said demonstrated “sound judgment” when turning down a role to assist the Tory-led coalition government.
Conservative former health secretary Victoria Atkins, now serving as shadow health secretary, had earlier raised a series of questions about Mr Milburn’s level of access and highlighted his private health sector interests.
She also claimed: “This is just more evidence of cronyism at the heart of this new Labour government.”
Streeting used his response to accuse Ms Atkins’ of being “among the worst” of the recent health secretaries.
David Cameron has criticised the government’s “misguided attack” on winter fuel payments and argued it should rethink to save “the shame and embarrassment”.
The former prime minister suggested the eligibility criteria for receiving the allowance should be raised using the tax system to exclude more wealthy pensioners.
Cameron, now a Tory peer, said: “As someone who made a promise to Britain’s pensioners to keep the winter fuel payment, and kept that for six years as prime minister, may I make a gentle suggestion to the Government?
“Instead of this misguided attack on the winter fuel payment, why not simply say that pensioners who are higher-rate or additional-rate taxpayers do not receive it?
“You may only raise 10% of the money but you would save 90% of the shame and embarrassment of the current position.”
Responding, work and pensions minister Baroness Sherlock pointed out the previous Tory government had attempted to do something similar with child benefit which resulted in “massive complications”.
She said: “We need to find something that works, that’s straightforward.”
She added: “The pension credit system is established – people know it is there. Our job is to make sure they can apply for it.
“If we can do that, we can ensure that they get not just this £200 or £300 but the thousands of pounds they might be entitled to under pension credit.”
Here is more from Rachel Reeves speaking at the Parliamentary Labour Party meeting.
“The new state pension has risen by 900 pounds compared with a year ago. That means that pensioners have 900 pounds more in their pockets this year than they did a year ago. Tomorrow, we get data for earnings growth, which will inform the increase in the pension next year. We are protecting the triple lock, not just for this year, but for the duration of this Parliament.”
She added: “Why are we having to make these savings? It’s not because we plan to, not because we wanted to, because there’s a 22 billion pounds black hole in the public finances because of the mess created by the previous government.
Reeves also said: “The first step of our manifesto was delivering economic stability. This 22 billion pound black hole would pose a risk to our financial stability and would mean that we would break our fiscal rules.”
Foreign Office minister Hamish Falconer has said changes to the UK sanctions on Russia will enable the Foreign Secretary to target individual ships suspected of trying to dodge existing sanctions rules.
He said: “This instrument, as well as increasing the effect on shipping, also broadens the designation criteria under the Russian regime. It expands our powers to target those who provide financial or material support to Russia’s war machine.
“This could include, for example, foreign financial institutions that facilitate significant transactions on behalf of or in support of Russia’s military industrial base.”
He added: “The amendment provides a ship may be specified by the Secretary of State where there are reasonable grounds to suspect that the ship is, has been or is likely to be used for any activity whose object or effect is to destabilise Ukraine or undermine or threaten the territorial integrity, sovereignty or independence of Ukraine, or to obtain a benefit from or support the Government of Russia.
“This includes where a ship is involved in carrying dual use or military goods, oil or oil products that originated in Russia, or any other goods or technology that could contribute to destabilising Ukraine.”
“It is often said there is never anything new in politics. And for old hands in Whitehall, there is nothing new about the Treasury’s sights being set on the winter fuel allowance.
The difference this time is that the arguments about the merits of means-testing the winter fuel allowance are playing out in the front pages of national newspapers and among jittery Labour MPs who face a crunch vote on Tuesday.
Those arguments happen every year – but they previously took place behind closed doors in the Treasury, the policy having been offered up to multiple Tory chancellors who have ultimately rejected it as a way of saving money.
Treasury insiders say that on this occasion, Rachel Reeves – in her first week on the job as chancellor – was presented with details of the hole in the public finances with a prepared series of options to plug the gap, which included £1.5bn from means-testing the winter fuel allowance.
It is a well-rehearsed routine. One former Treasury chief secretary recounts how officials would present him with a list of options for savings and clearly steer him towards their preference for where the axe would fall.
“They’d say, ‘here’s option A’, and when you asked for an option B or even C there would be lots of head-shaking and muttering and you’d have to really push them,” he said.
Rachel Reeves tells Labour she is 'not immune' to concerns over winter fuel allowance plans
The chancellor Rachel Reeves told a meeting of the Parliamentary Labour Party on Monday evening that she is “not immune” to concerns over plans to dramatically scale back the winter fuel allowance.
She said: “I understand the decision that this Government have made on winter fuel is a difficult decision. I’m not immune to the arguments that many in this room have made. We considered those when the decision was made.
Reeves pointed to the rise by £900 of the new state pension compared to a year ago.
“Tomorrow, we get data for earnings growth, which will inform the increase in the pension next year. We are protecting the triple lock, not just for this year, but for the duration of this Parliament.”
Reeves said there would be “more difficult decisions to come.”
“I don’t say that because I relish it. I don’t, but it is a reflection of the inheritance that we face. So, when members are looking at where to apportion blame, when pensioners are looking where to apportion blame, I tell you where the blame lies.
“It lies with the Conservatives and the reckless decisions that they made.”
Wrongly accused subpostmasters will be given an opportunity to have their cases re-assessed, as part of an an additional independent appeals process to the Horizon shortfall scheme (HSS), the government has announced.
Business secretary Jonathan Reynolds told the Commons the new appeals process would be “easy” to engage with and its outcomes would be “delivered at pace”.
He added those with “new information” will be able to access the scheme, but shadow business secretary Kevin Hollinrake argued it should be open to all subpostmasters.
Reynolds said: “As we stand and sit here today in the shadow not just of this scandal, but of Grenfell, of infected blood and several more, I know it is the firm conviction of everyone in this House that we must do better.
“This is not an issue of politics, but of justice.”
He added: “The Horizon Compensation Advisory Board recommended last year that we should introduce an independent appeals process to the Horizon shortfall scheme. Today, I am pleased to announce that we have accepted their recommendation.
“This appeals process will enable claimants who have settled their claim under the HSS to have their case reassessed with the benefit of any new information that they were not able to include in the original application.
“It will be delivered by my department in house, and we will apply the lessons learned from address schemes to date to ensure that the process is easy for postmasters to engage with and the outcomes are delivered at pace. We will announce further details in the coming months.
“There will be no obligation for postmasters to appeal their settlement, and no doubt many will be content that their claims have been resolved fairly.”
A Conservative former minister Simon Hoare, has pressed the government on whether it will fund rural councils to support bus services.
Transport minister Simon Lightwood replied: “Of course, all funding is being considered in the round as part of the spending review but I take his points on board.”
Labour MP for Sheffield South East Clive Betts asked about funding options for authorities.
Lightwood said: “There was a whole host, a plethora of different funding pots that relate to buses and we’re keen to amalgamate, to consolidate those, but importantly to devolve those to local areas and give them the flexibility that they need with that funding to deliver better buses across their areas.”
Ministers are “looking at the future” of a scheme launched by the previous government which capped some local bus fares at £2.
Transport minister Simon Lightwood told the Commons: “Delivering reliable and affordable public transport services for passengers is one of the government’s top priorities and we know how important it is for passengers and for local growth.
“We’re looking at the future of the £2 fare cap as a matter of urgency, and we’re considering the most appropriate and affordable approach, and we’ll update the House in due course.”
Eight Commons select committee chairs elected unopposed
Andrew Sparrow
The chairs of Commons select committees are now elected by MPs, and the elections are taking place this week. But some posts were uncontested and Lindsay Hoyle, the speaker, made an announcement in the chamber this afternoon about the chairs elected unopposed. They are:
Labour to give English local authorities power to run bus services
Local transport authorities across England will be able to run and control bus services under a Labour overhaul designed to “save vital routes”, Simon Lightwood, the transport minister, has told MPs in a Commons statement. Here is the Department for Transport’s news release and and here is Gwyn Topham’s story.
Andrew, do you know of any statistics as to what percentage of pensioners receive over the pension credit amount? It has always struck me as odd that a lot people assume that pensioners are poor, and having been a pensioner now myself for over ten years, I am very aware that many pensioners are comfortably off with no mortgage payments or commuting fares to pay. Some facts would be useful.
According to DWP statistics, there were 12.6m people getting a state pension in February 2023, and 1.4m people were getting pension credit. That amounts to 11%.
If you want more facts on pension incomes and benefits, I posted a good passage about this from Torsten Bell’s new book on the blog last week.
Education minister plays down claims VAT on private school fees will push lots of pupils into state sector
Sally Weale
Government plans to introduce VAT on private school fees also came under fire during education questions, with Tory MPs warning of a looming capacity crisis in the state sector as a result of the tax hike.
Shadow education secretary Damian Hinds warned of bigger class sizes and a shortage of school places, as a result of parents pulling their children out of the independent sector to avoid the additional fees. He asked:
What will ministers say next September to parents who, because of their education tax, find bigger class sizes, more schools full and fewer having been able to get their first choice school in Bristol, in Bury, in Salford, in Surrey?
Education minister Stephen Morgan responded:
The number of children in private schools has remained steady, despite a 20% real terms increase in average private school fees since 2010 and a rise of 55% since 2003.
He said his department would be monitoring occupancy and would work with local authorities to help them fulfil their duty to secure places.
Government plan to means-test winter fuel payments could push extra 100,000 pensioners into poverty, thinktank says
A thinktank has suggested that the government’s plan to means-test winter fuel payments could push an extra 100,000 pensioners into poverty.
In a briefing sent out ahead of the vote tomorrow on removing winter fuel payments from all pensioners apart from those receiving pension credit, the Joseph Rowntree Foundation says the government’s policy is likely to increase the number of pensioners living in poverty (defined as having less than 60% of median household income). It says:
One in six pensioners are in poverty in the latest data covering 2022/23 - 16% or 1.9 million. Relative pensioner poverty fell from 25% to 13% between 2002-2011, but it has increased by three percentage points since 2012/13.
Were winter fuel payment eligibility restricted in 2022/23 in the way the government is planning to this winter, an extra 100,000 pensioners would have been in poverty, pushing the total number to 2 million. This would have increased the pensioner poverty rate by one percentage point to 17%.
The JRF says the government can partly alleviate the problem by getting more pensioners to claim pension credit (which it is doing – see 2.36pm). But it says this alone will not solve the problem, because some pensioners living in poverty are not eligible for pension credit. It suggests paying winter fuel allowance to all pensioners living in homes with low council tax bands, such as A-B, or A-D. Targeting bands A-D would cover 80% of pensioners in poverty, it says.
