'Austerity Is Labour's Choice': Outrage as Starmer Cuts Winter Fuel Allowance

Progressive critics and lawmakers are expressing outrage after the U.K. Parliament on Tuesday voted to cut a winter fuel allowance for millions of Britons, calling the move by the ruling Labour Party, which took power in July, a continuation of the Conservative Party's austerity policies.

The measure turns the allowance, which provides £200 to £300 ($262 to $293) per year to senior citizens for heating bills, into a means-tested program in which only the poorest will qualify. It's expected to reduce the number of people receiving the winter payment from 11.4 million last year to 1.5 million this year. Prime Minister Keir Starmer called it a "tough choice" that was necessary because of the poor state of the British treasury.

A vote to overturn the cut lost 348 to 228 on Tuesday after Labour successfully whipped enough its members of Parliament into supporting the cut. Fifty two Labour MPs abstained, at least 20 of whom had expressed opposition to the plan, and one voted in opposition.

Former Labour leader Jeremy Corbyn, who now represents voters as an independent, condemned Starmer's move.

"Cutting winter fuel allowance is not a tough choice," Corbyn wrote on social media. "It's the wrong choice—and we will not be fooled by ministers' attempts to feign regret over cruel decisions they don't have to take."

"Did he get permission from the Tories to reuse their trademark slogans?" he asked of Starmer in an a Tuesday op-ed in Tribune.

Under the headline, "Austerity Is Labour's Choice," Corybn railed against Starmer and his allies for falling back on the kind of neoliberalism that has dominated the U.K. for decades. He wrote:

It is astonishing to hear government ministers try to pull the wool over the public's eyes. The government knows that there is a range of choices available to them. They could introduce wealth taxes to raise upwards of £10 billion. They could stop wasting public money on private contracts. They could launch a fundamental redistribution of power by bringing water and energy into full public ownership. Instead, they have opted to take resources away from people who were promised things would change. There is plenty of money, it’s just in the wrong hands.

The winter fuel payment was introduced as an unconditional cash transfer in 1997 under then-Chancellor of the Exchequer Gordon Brown. Some economists have argued that U.K. pensioners are in better position today than than were then, and thus the payment no longer makes sense; others have noted that in real terms, the payment is far lower than it used to be, due to inflation, and thus had become a relatively insignificant benefit anyway.

However, progressives have called the cuts, which were first proposed after Labour took office and weren't mentioned during the election campaign, far too drastic, given the roughly 10 million people they'll effect. Meanwhile, Corbyn and others have argued that Labour's move marks a loss for universalism and could auger more cuts to come:

A universal system of welfare reduces the stigma attached to those who rely on it, and removes barriers for those who find it difficult to apply (both are reasons why the take-up of means-tested payments is so low). What next for means testing? The state pension? The NHS [National Health Service]?

Some commentators have objected to rich pensioners receiving benefits such as the fuel allowance. Progressives have responded that the money should simply be clawed back through higher tax rates on the wealthy.

"In my view the government should be looking to raise revenues from the wealthiest in society, not working class pensioners," Jon Trickett, the only Labour MP to vote to nix to the cut, said in a statement issued on social media.

Universal programs make it easier to reach all those who need help, progressives argue. The new winter fuel payment will be set up so that only those who receive a Pension Credit or other similar government benefit will be eligible for it. But only 63% of pensioners who qualify for the credit actually receive it, government statistics show. The government has announced a campaign to try to increase uptake of the credit.

Trickett said that he feared it would lead more senior citizens to fall into poverty during what he predicted would be an "extremely difficult" winter for his constituents in West Yorkshire. "After years of obscene profiteering by energy companies, they are hiking bills yet again," he wrote.

Rachel Reeves, the Chancellor of the Exchequer, said the cut would save the treasury £1.4 billion ($1.8 billion) this year. She argues that the Conservatives, who held power from 2010 until July, initially as part of a coalition, left the national finances in a dire state and Labour must fill a £22 billion ($28.7 billion) budgetary "black hole."

Labour hasn't released an official impact assessment of the winter payment measure. Reeves, like Starmer, has said she didn't want to make the cut, but two weeks ago a video clip of her proposing to cut the allowance as an opposition MP in 2014.

Reeves and Starmer have long tried to establish their fiscal prudence and distance themselves from purportedly free-spending progressives in their party. A progressive commentator on Novara Mediacalled their winter allowance cut an "incredible political fumble."