A Labour minister has defended cutting pensioners’ winter fuel payments as she said the UK faced an economic crash if they did not.
Commons Leader Lucy Powell insisted the country could have suffered a run on the pound if Chancellor Rachel Reeves had not axed payments for millions of pensioners. The Government faces increasing pressure from opponents, campaigners and some of their own MPs over the decision to means-test the payments worth up to £300.
Ms Powell said there was “no alternative” to avoid an economic catastrophe after Labour inherited a £22billion black hole in the public finances. “This is one of those very difficult decisions we had to take,” she told Times Radio.
“But we have faced this huge additional black hole for this current financial year, borrowing higher than anybody understood. If we hadn’t taken some of these tough decisions we could have seen a run on the pound, interest rates going up and crashing the economy. It’s something we were left with no alternative but to do.”
Ms Powell insisted Labour’s approach was not the same as George Osborne-style austerity. She said it was “very different” to the former Tory chancellor’s decision “to dramatically reduce the size and the reach of the state, the welfare state”.
“What we’ve been left with is a huge legacy of overspend,” she told LBC. “They’ve overspent on the asylum system to the tune of nearly £7billion, they knew that the public sector pay deals that were sitting on their desk before the election would be honoured by them or any incoming government, and they hadn’t set aside any money.”
From this winter, the fuel payments will be restricted to the poorest pensioners, those who are on pension credit. The Government has launched a campaign to encourage those eligible for the benefit to claim it.
How to check eligibility for Winter Fuel Allowance
According to the Department for Work and Pensions (DWP) around 880,000 eligible pensioners are missing out on pension credit. Changes to winter fuel payments will restrict the benefit payments to those receiving pension credit or other means-tested benefits. Pension Credit Week of Action has been launched by the Government to encourage those who are retired to check their eligibility and make an application.
Pensioners whose weekly income is below £218.15 for a single person or £332.95 for a couple are being urged to use the DWP’s online calculator to determine their eligibility for payments. People with a severe disability, carers and those who are responsible for a child or a young person who lives with them could receive additional money, the Government said.
Pension credit can also include extra amounts for certain housing costs, such as ground rent or service charges.