On paper, the result was a success for Labour. Despite excited reports, government whips managed to keep their party’s great winter fuel revolt down to 40-odd abstentions and a single rebel. Poor Jon Trickett was the only government MP to troop into the Opposition lobby; given the treatment meted out to the child benefit rebels, he could now face a similar punishment of losing the Labour whip. By 348 to 228, MPs voted down the Conservative motion today to reverse the cut, with the government’s majority dropping from 167 to 120. Yet today’s victory is a sign of worse to come in the future.
The ninety-minute debate in parliament was not one for the ages. Sensing easy capital, every Opposition party opted to reject the government’s stance and join the Tories in voting to reject Labour’s cut. Mel Stride, the shadow work and pensions secretary, insisted ministers did not tell the truth about its plans at the election. He said the Conservatives stand ‘full square behind our elderly’ and urged Labour MPs audaciously, if implausibly, to ‘look to your consciences.’ In response, Liz Kendall, his opposite number, listed various measures Labour is taking to increase pension credit uptake: sharing data with local authorities, launching a new awareness campaign, writing to all eligible pensioners on housing benefits and automating the overall process to ‘guarantee uptake’.
One of the better contributions though came from Harriet Baldwin. The Tory MP asked the Work and Pensions Secretary to confirm that if all people eligible claim pension credit, that would cost more than the money saved from the cut. Kendall, unsurprisingly, ignored the question, preferring to talk about Conservative failings here. But Baldwin is right: means-testing the winter fuel payments with 100 per cent pension credit take-up would be more expensive for the Treasury than the status quo, not cheaper. It illustrates the difficulty facing Rachel Reeves and her team as they approach the Budget at the end of next month. There are few ‘easy’, painless cuts they can make; far too little low-hanging fruit, untouched after 14 years of Tory government.
Indeed, speaking to Labour MPs, what emerges is not so much a criticism of the policy but rather the decision-making process behind it. Cuts to winter fuel allowance have been considered and rejected by successive Chancellors, on the grounds that the savings were not worth the political cost. Indeed, George Osborne – the supposed bogeyman of austerity – has said on his podcast that all Reeves’ measures were ‘absolutely from the heart of Treasury orthodoxy’ when he was Chancellor from 2010-2016. So why then did Reeves go for a cut that had been repeatedly offered and rejected by her predecessors – especially when the savings could be much less than first forecast?
The answer, of course, is that savings have to start somewhere. Backing down, especially after Lucy Powell’s claim that it could cause a ‘run on the pound’, risked sending a signal to the markets that Labour were not going to make good on all their promises of fiscal prudence. In spite of Kendall’s talk today of an ‘awareness’ campaign, ministers will privately hope that pounds saved on winter fuel allowance mean fewer difficult divisions further down the line. Yet for new Labour MPs, today’s vote has been another reminder of the realities of governing. As Keir Starmer warned them last month, things are likely to only get worse, before they get better.
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