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Politics latest: Chancellor performs 'huge, huge U-turn' on winter fuel - and PM told to apologise

Rachel Reeves has announced the winter fuel payment will be restored to all pensioners with a taxable income of 拢35,000 or less. It means millions more will get the benefit, despite ministers repeatedly ruling out a U-turn.

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Have your say: Is chancellor right to U-turn on winter fuel?

The chancellor has changed course and made millions more pensioners eligible for the winter fuel payment.

Was it the right call? Or did you support the original cuts?

And how do today's changes impact you or someone in your family? Did you miss out last year and will now get it back? Or perhaps you're still over the new 拢35,000 threshold?

Share your comments using the form at the top of this page.

Another U-turn down the road on two-child benefit cap?

In his defiant defence of the government's U-turn, pensions minister Torsten Bell seems to have given a nod that more such direction changes could be on the way.

One policy Labour backbenchers are keen to amend is the two-child benefit cap, which was brought in by the Tories in 2017.

They want to see families with more than two children get benefits for subsequent children.

Labour MP Rebecca Long-Bailey asked about if this change was coming down the road.

Bell said: "If we look at who is struggling most, having to turn off their heating, it is actually younger families with children that are struggling with that. 

"So she's absolutely right to raise this issue. 

"It is one of the core purposes of this government, we cannot carry on with a situation where large families, a huge percentage of them are in poverty."

This seems to be a nod that the policy could be on the chopping block - and follows hints from other ministers like Education Secretary Bridget Phillipson:

No sign of an apology for pensioners who lost out on winter fuel payments

Torsten Bell, the pensions minister, was the one sent to the despatch box this afternoon to endure the wrath of MPs in the wake of the winter fuel payment U-turn.

He is, as of writing, still there.

Unsurprisingly, Conservative MPs are vociferous in their criticism. 

Shadow work and pensions secretary Helen Whately grandstanded, remaking points we are all familiar with.

She did start, however, by saying she felt for Bell being sent out "by his bosses to complete what must be the most humiliating climbdown a government has ever faced in its first year in office".

Bell was seen bellowing "Liz Truss" at her from across the aisle.

'Chilling'

Conservative MP Dame Harriet Baldwin - who was formerly chair of the Treasury select committee - said Chancellor Rachel Reeves made a "chilling" decision last year when she changed winter fuel.

Bell - who at one pointed boasted that consumer champion Martin Lewis had praised the U-turn - was pushed on various technical points too.

Will family estates be pursued for money back after a pensioner dies? No.

Will savings be counted towards the threshold for winter fuel payments? It depends if it's taxed or not.

There was also criticism from the Labour benches - with the likes of Rachel Maskell and Imran Hussain welcoming the U-turn.

However, both they and other Labour MPs said they wanted the government to go further - including by scrapping the two-child cap to bring down child poverty too.

Despite being invited to do so, Bell declined on multiple occasions to apologise to pensioners who had their winter fuel payments taken away last year and who will now be getting them back.

Spending review 'settled', says Downing Street

Ahead of Wednesday's spending review, the government has confirmed all departments have settled their budgets with the Treasury.

There had been reports Yvette Cooper in the Home Office had been holding out for extra cash, but this looks to have been figured out.

Rachel Reeves will deliver the spending review to parliament at around 12.30pm on Wednesday - we'll bring you live coverage.

The prime minister's spokesperson confirmed the review was settled earlier this afternoon.

Watch live: Pensions minister giving winter fuel U-turn statement

Torsten Bell is on his feet in the Commons, laying out the government's winter fuel payment U-turn.

You can watch live in the stream at the top of this page.

If it's still playing the usual Sky News channel stream, refresh the page.

Half of SME housebuilders 'to be bust by next election', report to warn

By Mark Kleinman, City editor

Half of Britain's 2,500 remaining smaller housebuilders could crash into insolvency by the end of this parliament as a consequence of the cost of industry regulations, a report will warn this week.

Sky News has seen a document to be published on Tuesday - ahead of the government's spending review - which will refer to "a perfect storm of costs" that threatens to wipe out the profits of SME housebuilders.

The bleak forecast is the principal conclusion of a report produced jointly by the public affairs firm WPI Strategy and ChamberlainWalker, an economics consultancy specialising in housing and planning.

It casts a fresh shadow over the government's target of building 1.5m homes during the course of this parliament - one of its most important manifesto commitments ahead of last year's landslide victory.

'That's your narrative': Farage bites back at suggestion he doesn't work well in teams

Nigel Farage has defended his ability to work well with colleagues, following the high-profile resignation of Reform UK's chairman. 

Zia Yusuf quit on Thursday, following a row over banning burkas - which is not the party's policy, but was raised by one of its five MPs.

Yusuf has since rejoined the party to lead cost-cutting initiatives at the councils under its control.

Is the cult of Farage a problem for his parties?

Farage was asked by our political correspondent Tamara Cohen if he sees it as his fault that Reform and his previous parties, such as the Brexit Party and UKIP, have had a string of high-profile spats and resignations. 

"That's your narrative," Farage responded, suggesting "the evidence is actually very different".

He said he's still working with some people he first met 25 years ago, and others he employed in the City "back in the 90s are still personal friends".

Only someone who "talks behind my back" and "betrays that trust" will get the silent treatment from him, he said. Any fallouts are the result of "people who think they're bigger and better than me".

Reform needs a 'broad-based team'

Turning to Yusuf's resignation, Farage said he "wasn't exactly chuffed" but the ex-chairman had apologised, been forgiven, and "we move on".

A suddenly more contrite Farage added: "I understand the basis of the question. What I have to do, as we head towards the next general election, is show I'm able to put together a broad-based team, and it is about much more than me. 

"I believe we're building that already, and I intend to go on doing so."

Never mind the spending review coming up on Wednesday, the government has already delivered a big headline for the week with its winter fuel payments U-turn.

Here are the main things you need to know:

  • Millions more people will get the winter fuel payment this year, after the criteria was expanded to all pensioners in England and Wales with a taxable income of 拢35,000 or less;
  • It'll be 拢200 for most, 拢300 for homes with someone over 80, and all pensioners will get it automatically - those above the threshold will then have the cash recovered by HMRC;
  • The change will see the number of people who get the payment rise from approximately 1.5 million last year to nine million;
  • Rachel Reeves claimed an improving economic picture meant she could expand the benefit, but the specifics on how it'll be paid for won't be made clear until the budget later this year.
  • Tory leader Kemi Badenoch said the prime minister should apologise to pensioners who lost out last year, while Lib Dem chief Ed Davey said the initial cuts had been "disastrous";
  • The U-turn has also been welcomed by Reform's Nigel Farage, the SNP, and charities like Age UK;
  • But our deputy political editor Sam Coates said it had caused damage to the chancellor's credibility, and our political correspondent Liz Bates said the change represented a "huge, huge U-turn".

We'll have more reaction and analysis following the winter fuel announcement throughout the afternoon - and you can watch a Commons statement on the changes from around 4.30pm.

Politics Hub With Sophy Ridge will no doubt be dominated by the changes - you can watch live at 7pm.

Away from winter fuel, we'll bring you any updates from the prime minister's meeting with the boss of NATO, more comments from Reform's Nigel Farage, and much more. Stay with us!

SNP calls on Reeves to reverse other 'punitive' policies following fuel U-turn

The SNP has said Labour must learn lessons from the "damaging mess鈥� caused by robbing pensioners", following the government's U-turn today. 

The party, which has no little stake in the argument as the Scottish Parliament can issue its own winter fuel payments independently, has used the afternoon to criticise Rachel Reeves anyway.

It says her U-turn was "inevitable" and the government must go further, including scrapping "punitive" welfare policies like its planned disability cuts and the Tory era two-child benefit cap.

"At the spending review on Wednesday, the Labour government must end its austerity cuts for good - and not impose even more cuts to families and public services," he added.

This morning, ministers pledged there would be no return to austerity - saying that period is "over".

And the government has repeatedly refused to rule out reversing the two-child benefit cap.

Sir Keir Starmer has also faced a lot of flak from some of his backbenchers over proposed cuts to personal independence payments (PIP), which are received by people living with a disability.

Resolution Foundation criticises chancellor for rewarding 'the richest half of the population'

The government has faced plenty of criticism for taking too long to U-turn on cuts to winter fuel payments.

But the chancellor has now also been slated for taking the U-turn at all - with one group saying she is giving the benefit to too many rich pensioners, again.

The Resolution Foundation, a left-wing think tank, has said the changes announced today will create "new complexity in the tax system".

Alex Clegg, an economist at the organisation, said an income of 拢35,000 (the new limit on who gets the payment) had become a "cliff-edge".

He added: "The reported savings of 拢450m will be reduced further by the cost of increased pension credit take-up as a result of the original policy, and the cost of administering the new means-test.

"The real question is why it is now a priority to pay winter fuel payments to over three quarters of pensioners, with almost half of the new beneficiaries in the richest half of the population, when previously it was judged that only one in 10 needed support."

For context: This think tank is a broadly pro-Labour group whose ex-CEO Torsten Bell was elected as a Labour MP at the last election.

Rachel Reeves must be feeling like she can't win.