No 10 to rethink fuel payment cut as local election losses alarm MPs

Downing Street is rethinking its controversial winter fuel cut amid growing anxiety at the top of the government that the policy could wreak serious electoral damage, the Guardian has been told.

- Pippa Crerar

Keir Starmer's senior team has been discussing for several weeks how to handle public anger over the policy, which bubbled over in last Thursday's local elections, where the party lost two-thirds of the council seats it was defending.

While a full reversal of the cut is not expected, No 10 sources said they were considering whether to increase the £11,500 threshold over which pensioners are no longer eligible for the allowance.

Labour MPs have been piling pressure on the government to change its mind over the winter fuel payment, as well as its plans for £5bn benefit cuts, before a crunch vote on "stage one" of its welfare plans in early June.

The government is planning to come back for "stage two" this autumn, the Guardian has been told, though there are concerns that further cuts may inflame tensions even further with angry party MPs.

Labour activists say benefits were raised repeatedly on the doorstep in the local elections across England and were a key factor in the party's loss to Nigel Farage's Reform UK at the Runcorn and Helsby byelection.

Ministers and senior officials have told the Guardian they believe last July's decision to cut the winter fuel allowance from all but the poorest pensioners has been a disaster.

A cabinet minister said: "It comes up on the doorstep all the time. Winter fuel will lose us the next election, it was a terrible mistake. But it's probably too late for a U-turn now."

The Welsh first minister, Eluned Morgan, will give a speech today that will criticise the welfare cuts, setting out a clear dividing line with Welsh Labour, which she will position on the left of the UK party.

Downing Street figures acknowledge the concern that exists over the policy at all levels of the party - and among voters - and said there had been many conversations over the issue in recent weeks.