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British Chancellor Rachel Reeves is intended to restore winter fuel payments to all except 2 million pensioners with income of more than 35,000 GBP in a U-turn that will cost the Ministry of Finance 1.25 billion GBP.
Reeves announced the withdrawal before the issue of expenses this week when she tried to collect some positive headlines at a time with close pressure on some public service budgets.
Labor from Labor from Labor in English local elections and the subsequent counter -reaction of the party members in Westminster were forced into a U -turn in the last month.
As part of the revised plan, around 9 million pensioners receive the fuel payment this winter, which is either £ 200 or 300 GBP.
Around 2 million pensioners with taxable income of more than 35,000 GBP would also receive the payment, but the money is reclaimed by HM Revenue & Customs.
Reeves’ U -turn leaves it until the end of the decade with a hole of 1.25 billion.
The Chancellor said on Monday that the costs in her autumn budget were taken into account and that she would take steps to fill the tax hole. “This will not lead to permanent additional borrowing,” said the Ministry of Finance.
Many economists believe Reeves It will be forced to increase taxes in autumn, not least because the Labor MPs put pressure on their plans to reduce social contracts.
As part of the original plan of Reeves, only the poorest pensioners – those who have received a pension credit – would continue to receive the winter fuel payment. About 10 million such a subsidy were lost.
The revised plan takes place about 2 million pensioners, to whom the subsidy is paid automatically before it is recovered, either through its employers and pension providers or through annual tax returns.
The Ministry of Finance argued that these 2 -meter pensioners “lived well above the level of income of pensioners in poverty” and that the threshold of £ 35, on the whole, corresponded to the average profit in general.
Money is withdrawn from individuals rather than households, which means that couples with a person under the threshold still receive a partial payment, even if their partner’s income is too high, said the Ministry of Finance.
“It was a difficult decision to aim for the payments of winter fuel numbers, but it was the right decision because the previous government we had left by the previous government,” said Reeves.
“It is also correct that we continue to test this payment in such a way that it is targeted and fair instead of restoring the authorization for everyone, including the richest.”
The Ministry of Finance said that the last program for this winter would save 450 million GBP compared to the original program, which was a universal performance that was paid to all pensioners.
But some experts have warned The U -turn could mean that the government only achieves very limited savings, since the first cut last year caused more pensioners to register for pension credit.
There were about 230 million GBP of new requirements for pension loans after the government initially encouraged applications to compensate for the effects of the cuts.
The conservative leader Kemi Badenoch said: “This humiliating turnaround is forced to choose between heating and food last winter. The prime minister should now apologize for his terrible judgment.”
The chairman of the UK reform, Nigel Farage, who asked the government to reverse the reduction, said his party could “claim credits” for the U -turn. “I think we did the political weather in this case,” he said on Monday in Wales in Wales.
Additional reporting from Anna Gross in Port Talbot
