Energy Secretary Ed Miliband has defended Chancellor Rachel Reeves’ original decision to cut winter fuel payments and the subsequent partial U-turn.
He told the BBC the chancellor would not apologise for withdrawing the payment from more than 10 million pensioners last year, arguing that she had to take measures to stabilise the economy.
He said the decisions she had taken last year had created “room for manoeuvre” enabling her to extend the payment to more pensioners this coming winter.
Miliband said the move would cost “a relatively small amount of money” and would be accounted for in the Budget but the Conservatives said ministers did not know how it would be funded.
Last July, the government announced it would be withdrawing the payment, worth up to £300 per year, from more than 10 million pensioners.
It meant that last winter only those receiving pension credit or another means-tested benefit would be eligible – an estimated 1.5 million individuals.
However, following pressure from charities, unions and its own backbenchers, the Labour government announced it would partially reverse that decision, expanding eligibility to more than three-quarters of pensioners.
Under the revised policy, nine million pensioners in England and Wales with an annual income of £35,000 or less will receive the payment this winter.
Asked if the government would apologise, Miliband said Reeves had not wanted to make the original cut, but had to act to stop the economy “going off a cliff”.
He argued that since last summer, the nation’s finances had stabilised and the government had “heard the strength of feeling” from voters.
He said the government was “sticking by the principle” that the wealthiest pensioners should not get the payment, but it was right to expand the numbers who would receive it.
Pressed on how the government would pay for the change, which is expected to cost around £1.25bn, Miliband said the details would be set out in the autumn Budget.
The government has argued that the change would “not lead to permanent additional borrowing” due to an improving economy.
However, although economic growth was better than expected in the first quarter of 2025, analysts expect it to slow in the coming months.
The Conservative shadow chancellor Mel Stride said there was “no justification for leaving pensioners in the cold last winter”.
He said Labour had already spent savings from the original cut on “inflation-busting pay deals for the unions” and that the chancellor did not know how she would pay for the U-turn.
Liberal Democrat leader Sir Ed Davey said: “Countless pensioners were forced to choose between heating and eating all whilst the government buried its head in the sand for months on end, ignoring those who were really suffering.”
However, Paul Johnson, head of the Institute for Fiscal Studies think tank, said extending the winter fuel payment “wouldn’t be in the top 100 things” he would do if he had £1.25bn to reduce poverty.
“Almost none of the people impacted by this will be in poverty – most of them will be at least as well off as the average in the population,” he told BBC Radio 4 PM programme.
“We know that poverty is much worse among families with children than it is with pensioners, and of course the poorest pensioners are already getting this.”
The Resolution Foundation said the U-turn would create “new complexity” in the tax system and that any savings from the policy would be eaten up by the administrative cost of means-testing the payment.
The government said no one would need to register with HMRC or take any further action to receive payments, and pensioners who want to opt out will be able to do so through a system set to be developed.
