Winter fuel payments were ended for millions of pensioners to prevent the economy from crashing, a minister has claimed.
Commons leader Lucy Powell suggested there could even have been a run on the pound unless Labour had cut day-to-day government spending.
Her comments come amid a growing backlash to chancellor Rachel Reeves’ decision to end winter fuel payments for all but the very poorest pensioners.
An estimated 10 million old people will lose out on payments of up to £300 a year as a result of the controversial decision.
On Sky News this morning, presenter Trevor Phillips asked Powell: “When the prime minister said this week ‘those with the broadest shoulders should bear the heaviest burden’, was he talking about the 10 million pensioners who will lose [winter fuel payments]?”
Powell told him: “Well this is an example of one of the very difficult decisions that we’ve had to make that we didn’t want to make, that we weren’t wanting to do when we got elected.”
After Phillips told her “you didn’t have to make it”, the minister replied: “It is really important for people to understand the context.
“What we found was that spending was much higher in the current year that we are in than anybody had thought.
“There was a black hole of £22 billion that was made up of things like nearly £7 billion of underfunding of the asylum system, that the previous government knew was there and they put their head in the sand and didn’t take the difficult decisions they needed to take because they knew they were going to lose the election.
“That’s why we’ve had to take some of these really difficult decisions around means testing the winter payments so that the poorest pensioners continue to receive it, but some of the wealthiest pensioners won’t.”
But Phillips replied: “You are now the government, you made a choice, and the first choice you’ve made was to withdraw the allowance from pensioners, in the same way that you’ve chosen to hand out pay increases way above inflation while you’ve been telling others with three children that you’ll have to wait until you’ve found the money to lift the benefit cap. These are your choices.”
Powell replied: “Finding in-year savings in the current year is very difficult indeed.
“If we didn’t, we would have seen the markets losing confidence, potentially a run on the pound, the economy crashing and the people who pay the heaviest price for that when the economy crashes is the poorest in society, and people like pensioners.”
Shadow Treasury chief secretary Laura Trott said: “This simply shows how desperate the new Labour government is to run from responsibility for the tax rises they always planned but hid from the public during the election.
“After handing billions in inflation-busting pay rises to their union paymasters, no-one believes Labour’s chicken little strategy.
“They should stop trying to deceive the public with ridiculous fantasies and instead have the courage to let parliament debate cuts to winter fuel payments for the sake of those pensioners who will lose out thanks to the decisions of this government.”
Both the Tories and Lib Dems are planning to force a Commons vote on the removal of winter fuel payments to all but those who claim pensioner credit.
Some Labour MPs are threatening to rebel by voting with the opposition in protest at the chancellor’s decision.
The government is launching a campaign urging those who do not claim the £3,900 benefit but are entitled to it to do so.
The average pension credit is £75 a week, but it is estimated that 880,000 who qualify for it do not claim it.