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Labour’s dramatic climbdown on winter fuel payments has ignited hopes that more of the planned welfare cuts could soon be reversed.
Top of the list is a growing demand to scrap the controversial two-child benefit cap, which is blamed for driving hundreds of thousands into poverty.
The Prime Minister appears to have been forced into a partial policy U-turn after a ferocious backlash over a move that saw millions of elderly people stripped of their winter fuel allowance.
In a significant shift, Sir Keir Starmer has now opened the door to extending the benefit once again based on an assumption of an improving economy.
The decision has led to pressure for a wider change in welfare policy. Significantly, the former Labour Prime Minister Gordon Brown has demanded an end to the two-child cap on benefits.
Speaking on the ITV Peston programme, he said: “The cost-effective way of getting more children out of poverty… is abolishing the two-child limit.”
A senior No 10 source told the Guardian: “We’re open to adapting policy as the circumstances allow. So when there’s an opportunity to make people better off, which is our central purpose, then we’re going to take it.”
Labour insiders say policies under review could include:
Scrapping the two-child benefit cap, which currently limits support to the first two children in a household on Universal Credit or child tax credit;
Curbing planned cuts to health and disability benefits, which threatens hundreds of thousands of the most vulnerable;
Tweaks to the Pension Credit threshold, to widen access to payments and other associated benefits.
Importantly, there is no firm commitment and any change would rely on recent economic growth being maintained, which is far from certain.
Sir Keir revealed the change to the Winter Fuel Allowance at Prime Minister’s Questions this week saying: “We want to make sure people feel those improvements as their lives go forward. That is why we want to ensure that as we go forward, more pensioners are eligible for winter fuel payments.”
He added: “As the economy improves, we want to take measures that will impact on people’s lives, and therefore we will look at the threshold, but that will have to be part of the fiscal event.”
The government’s move to means-test the previously universal winter fuel payments — a cut worth £1.5bn — has been widely blamed for Labour’s declining poll numbers.
Now, civil servants are racing to draft a new system that could expand eligibility without triggering ballooning costs. Gordon Brown has suggested giving the allowance, worth £100-£300, back to all pensioners except those on higher incomes who pay the 40% tax rate.
But time is tight. Tory leader Kemi Badenoch warned: “It will be too late if ministers wait until the autumn budget… they will lose this year’s entitlement.”
Meanwhile, eyes are turning to June’s spending review, where ministers are expected to unveil a £750m child poverty package. That could include expanded free breakfast clubs, more generous child benefit, or broader access to free school meals.
