Rachel Reeves 'will press ahead with winter fuel payment cut' despite £10 billion Bank of England windfall
20 September 2024, 13:26 | Updated: 20 September 2024, 13:29
Chancellor Rachel Reeves is still expected to press ahead with her plan to cut the winter fuel payment for millions of pensioners despite being handed a £10 billion budget boost by the Bank of England.
Listen to this article
Loading audio...
This comes after UK interest rates were left unchanged at 5% by the BoE, leaving extra wiggle room in the British economy and raising a reported £10 billion.
Reeves, however, is expected to bank the extra cash despite calls from her own party to use the funds to reinstate the winter fuel payment for struggling pensioners.
Speaking to the Times, Labour MP Rachael Maskell called on Reeves to walk back on the decision.
She said: “It's a responsible decision if they have got additional funding. I think there are many demands, but this is most urgent to keep people safe this winter. We've got to do everything we can to keep people warm.
“I would welcome the government delaying so they can properly review this decision and put mitigations in place to keep people safe.”
Despite calls from across the party, Treasury sources have said the Chancellor will press ahead with the plan to means test the payment.
The source told the publication: “The chancellor has said there will be difficult decisions across tax, welfare and spending at the budget.
“Nothing announced today changes that.”
Reeves announced the universal payment would come to an end when she laid out measures to tackle a £22 billion "black hole" in public finances.
The controversial move will see 10 million people stripped of their fuel allowance this winter.
The benefit was introduced in 1997 by the chancellor at the time, Gordon Brown, and it was intended to help other people with the cost of heating during the cold winter months.
However, when speaking to the Commons in July, the Chancellor Rachel Reeves announced that for the first time the payment would only be given to older people in receipt of pension credit.
It will be means-tested, and pensioners will have to answer 243 questions over 22 pages in order to claim the cash.
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."
