Exclusive
'Wrong policy at the wrong time': Labour peer hits out at government for cutting winter fuel allowance
23 August 2024, 19:06 | Updated: 23 August 2024, 19:40
Labour peer Prem Sikka has slammed his party’s decision to cut the winter Fuel Payment for millions of pensioners, branding it the “wrong policy at the wrong time.”
Listen to this article
Loading audio...
The payments will be scrapped for millions of pensioners as part of Chancellor Rachel Reeves' cuts to fill a "black hole" in public finances.
Baron Sikka, 73, criticised the decision as “wrong” and warned Sir Keir Starmer’s government of a rapid fall in popularity.
Speaking to LBC’s Ben Kentish, he said: "This is the wrong policy at the wrong time, it should never, ever have been introduced, it was not in Labour's manifesto and there's been absolutely no prior consultation with anybody.
Labour peer Prem Sikka tells Ben Kentish that his party's policy on winter fuel payments is 'wrong'
“It's just pulled out of the bag and almost implemented and it is the wrong policy and they will have to revisit it".
Baron Sikka added that alienating pensioners could spell disaster for the new Labour government.
He said: "It's barely six weeks after the election, the government's popularity's plummeting, a lot of pensioners were persuaded to vote for Labour and basically they feel let down and I've spoken to quite a lot in the last two, three days".
Instead of the decision to remove the payment all at once, the government should instead of opted for a tapered approach, Baron Sikka told LBC.
"It could have used a taper, at the moment there is a kind of a cliff edge and if you earn a pound more than £11,336, you just don't get any winter fuel payment...it could have added a winter fuel payment to the total income that meant some pensioners would then pay income tax on it, many won't...it could have simply left it alone, in other words kept the universality of this payment and recovered the cost of that by increasing income tax or other taxes on the ultra rich".
The decision to scrap the payment for millions of pensioners came after the government accused the Conservatives of creating a “black hole” in public finances.
Speaking to the Commons in July, Rachel Reeves said: "Today I'm making the difficult decision that those not in receipt of pension credit or certain other means-tested benefits will no longer receive the winter fuel payment from this year onwards.
"The Government will continue to provide winter fuel payments worth £200 for households receiving pension credit or £300 to households in receipt of pension credit with someone over the age of 80.
"Let me be clear, this is not a decision I wanted to make, nor is it the one that I expected to make, but these are the necessary and urgent decisions that I must make.
"It is the responsible thing to do to fix the foundations of our economy and bring back economic stability."
The announcement came as the Chancellor warned the Conservative party had left a £22 billion "black hole" in public spending.
Reeves said the Tories had hidden the extent of the hole in public finances, leaving the new Labour government with the worst inheritance since the war.
She said the Tories "gave false hope to Britain".
"The inheritance from the previous government is unforgivable.
"After the chaos of 'partygate', when they knew trust in politics was at an all-time low, they gave false hope to Britain. When people were already being hurt by their cost-of-living crisis, they promised solutions that they knew could never be paid for.
"Roads that would never be built. Public transport that would never arrive. Hospitals that would never treat a single patient.
"They spent like there was no tomorrow, because they knew that someone else would pick up the bill and then in the election - and perhaps this is the most shocking part - they campaigned on a platform to do it all over again."
