Rachel Reeves, Who Earns £159K, Defends £3,700 Claim While Pensioners Lose Winter Fuel Payments

Rachel Reeves, the Chancellor of the Exchequer, is facing criticism for claiming £3,700 in energy expenses over the last five years to heat her second home in Leeds, while millions of pensioners lose their winter fuel payments under new government policies.

Scrapping Winter Fuel Payments for Millions of Pensioners

Under the new means-tested system introduced by the Labour government, up to 10 million pensioners across the UK will no longer receive the annual winter fuel allowance, which can be worth up to £300. This controversial move has drawn widespread criticism, particularly from pensioners' advocacy groups and some Labour MPs.

Despite the backlash, Reeves defended her decision to claim the expenses, explaining that MPs, especially those representing constituencies outside London, need to maintain two homes: one in their constituency and another in the capital.

Reeves Responds to Criticism

Reeves, who earns £158,851 annually, acknowledged that her salary exceeds that of the average UK household but insisted that her role requires having a second residence in Leeds. She stated, "I recognise that I earn more than average families in Britain, but I'm also determined in this position to protect the most vulnerable, which is why the winter fuel payment will continue to be paid to pensioners on pension credit."

Pressed on her own energy expense claims, Reeves added, "Well, being a constituency MP means that you have to have a house in London as well as, of course, living in the constituency, and that's the same for all MPs. Those are long-standing rules."

Other Ministers' Energy Expenses Also Revealed

The controversy surrounding MPs claiming energy expenses is not limited to Reeves. Work and Pensions Secretary Liz Kendall, who oversees the department responsible for implementing the winter fuel payment cuts, claimed £1,284 towards her energy bills in 2021-22, a figure that increased to £2,400 last year.

Energy Secretary Ed Miliband also saw his energy claims rise from £650 to £1,100, while Education Secretary Bridget Phillipson claimed £1,052 in 2021-22, increasing to £1,896 last year. In total, 11 Cabinet ministers claimed a combined £7,187 towards their gas and electricity bills in 2021-22, a figure that soared to £12,620 in the first three quarters of last year.

Labour Faces Backlash Over Means-Testing Decision

The decision to means-test the winter fuel payment has caused significant disquiet among Labour MPs. On Tuesday, the House of Commons voted in favour of the government's plan to restrict winter fuel payments to only the poorest pensioners in England and Wales.

A Conservative motion to overturn the move was defeated by 348 votes to 228, but the decision has led to a quiet rebellion within the Labour ranks. One Labour MP, Jon Trickett, voted against the government's motion, while 52 others abstained. This large number of abstentions, while not an outright rebellion, indicates growing unease within the party.

Defending the Government's Tough Decisions

Labour ministers have defended the decision to cut winter fuel payments for the majority of pensioners, arguing that the changes were necessary to balance the country's finances. The government's position is that the payment cuts are a "tough but unavoidable choice" given the current fiscal challenges the UK is facing.

Simon Francis, of the End Fuel Poverty Coalition, criticised the move, highlighting the apparent disparity between MPs claiming expenses for their energy bills while pensioners are left to cope without winter fuel payments. "As MPs warm themselves at public expense, the reality for pensioners will be very different this winter," he said. "If Labour MPs are so keen to save money for the Treasury, maybe they could look closer to home for savings rather than taking from pensioners."

Despite the controversy, there is no suggestion that any MPs, including Reeves, have broken any parliamentary rules. A Labour spokesperson defended the accommodation cost Budget, stating: "The accommodation costs Budget is designed to meet costs incurred by MPs due to working from two permanent locations. MPs of all parties are entitled to this, and they continue paying their utility bills for their own homes like everyone else."

A Struggling Economy and Tough Choices Ahead

The row over winter fuel payments comes at a time when the UK economy is facing significant challenges. New data shows the economy failed to grow in July after flatlining in June, presenting another hurdle for Reeves and the Labour government, which has made economic growth one of its key priorities.

In response to the disappointing figures, Reeves tried to project optimism, while also warning that the upcoming Budget, scheduled for 30 October, would involve difficult decisions. "I've been clear that the Budget on 30 October will require difficult decisions on tax, spending, and welfare," she said. "But the prize—if we can bring stability back to our economy, if we can bring investment back to Britain—is economic growth, good jobs, paying decent wages in all parts of our country, to realise our huge potential."

Facing a £22bn Shortfall

Reeves also acknowledged the fiscal challenges facing the government, citing a £22bn shortfall in the public finances this year, partially due to above-inflation public sector pay awards. As speculation mounts over which taxes might be raised in the upcoming Budget, there is also discussion about whether Reeves will modify the government's borrowing targets, known as the fiscal rules.

These fiscal rules, which the government imposes on itself, are designed to manage borrowing within a five-year period. Changing the rules would give Reeves more flexibility in managing the tax and spending plans, but she has so far refused to rule out altering them.