Rachel Reeves has defended claiming expenses for energy bills at her second home after the Government’s plans to scale back winter fuel payments for pensioners cleared the Commons.
The policy, which will strip winter fuel payments from millions of pensioners, is set to go ahead despite a revolt by Labour MPs and warnings about the impact it will have on the elderly.
The Chancellor has insisted it is right to means-test the benefit, worth up to £300, in order to address the “black hole” in the public finances.
Records of the Chancellor’s energy bill claims show that she claimed back more than £3,000 over five years.
“Being a constituency MP means that you have to have a house in London as well as, of course, living in the constituency, and that’s the same for all MPs. Those are long-standing rules,” she told GB News after being asked if it was fair for taxpayers to pick up the bill to heat her second home.
The Chancellor was also asked whether the savings from the cut to winter fuel payment would be wiped out if all 800,000 pensioners who have not yet signed up for the pension credit did so.
She did not dispute that full take-up could negate the savings, replying: “I would prefer the poorest pensioners to get the support that they’re entitled to, I would rather pay money to the poorest pensioners than to continue with a universal winter fuel payment, which meant that some people who didn’t need the money, were getting it and weren’t using it to pay their energy bills.”
Shadow chief secretary to the Treasury Laura Trott said this constituted an admission that Labour’s winter fuel payments cut was a “political choice, not driven by finances”.
“The Labour MPs were marched through the lobbies yesterday on false pretences by a Chancellor who has planned to do this all along,” Ms Trott said.
Rishi Sunak said during Prime Minister’s Questions that the Chancellor “this morning admitted that she would prefer it if this policy didn’t even raise any money”.
Rishi Sunak accused Sir Keir Starmer of “hiding” the policy’s impact assessment and urged the Prime Minister to publish it.
Downing Street declined to comment on whether the impact assessment would be published in due course, while the Prime Minister’s press secretary insisted the Government had “operated with openness and transparency” on the policy.
Labour MP Andy McDonald said on Tuesday that his understanding was that savings to the public purse were predicated on pension credit take-up of 68% at best and that the savings would be wiped out if everyone eligible took up pension credit.
Liberal Democrat leader Sir Ed Davey meanwhile called for the Prime Minister to reverse a previous Conversative Party tax cut for banks rather than removing winter fuel payments for some pensioners.
The plan cleared the Commons on Tuesday with just one Labour rebel voting against it but dozens of MPs on the Government benches were missing in action.
It is understood that those who defied the whip, including those who abstained without permission, will face disciplinary action from the Labour whips.
The decision means that only those on Pension Credit or some other benefits in England and Wales will receive the payment, saving the Exchequer around £1.5 billion a year.
Ms Reeves told broadcasters: “We faced a situation when I became Chancellor that there was a £22 billion black hole in the public finances this year.
“That meant we had to make difficult decisions, tough decisions, to get a grip of those public finances so that we could bring stability back to the economy.
My comment on the winter fuel payment vote 👇 pic.twitter.com/lq5yD5hDUu
— Jon Trickett MP (@jon_trickett) September 10, 2024
“These weren’t decisions that I wanted to make. They weren’t decisions that I expected to make, but in the circumstances that we faced it was absolutely right to make sure that our public finances were on a firmer footing.
“Because only through doing that do we have the chance to bring stability back to our economy and start to grow the economy after 14 years of stagnation.”
On Tuesday, MPs voted 348 to 228 to reject a Conservative bid for the controversial policy to be blocked.
However, one Labour backbencher, Jon Trickett, opposed the Government in supporting the Tory motion, while 52, including seven ministers, had no vote recorded.
A dozen of those did not have permission to miss the vote and are thought to have abstained in protest at the policy.
Fifteen of the Labour MPs who signed a motion which called on the Government to delay implementing the cut were among those who did not vote.
Matthew Pennycook said there will be no U-turn on the policy despite the opposition from campaigners and some in his own party.
The housing minister told Sky News that “all of us took that decision with an extremely heavy heart” but “we’re not going to water down that policy”.
(2/5) we just don't think it's fair to remove the payment from the 2.5 million pensioners on low incomes who badly need it, and to do it so quickly this winter, at the same time as energy bills are rising by 10%.
— Age UK Campaigns (@ageukcampaigns) September 10, 2024
“We think it’s the right decision to make,” he said.
Asked why the Government is awarding pay increases to public sector workers, a key part of the “black hole”, he said: “What this Government has done is implement the recommendations of the independent public sector pay review bodies.
“Now, unless the opposition in Parliament are saying they would have rejected those recommendations out of hand, allowed industrial action to continue, which was extremely costly to the UK economy, they would have faced that same decision.”
Age UK’s charity director Caroline Abrahams said: “The reality is that driving through this policy as the Government is doing will make millions of poor pensioners poorer still and we are baffled as to why some ministers are asserting that this is the right thing to do.”
