Sir Keir Starmer is under growing pressure from his own MPs and political opponents to reverse last year’s decision take away winter fuel payments from around 10 million pensioners.
The row has exploded after Reform’s huge surge in the local elections last week causing panic among many MPs that Nigel Farage’s party could win their seats.
But it has also fuelled speculation that the prime minister will have to do a reshuffle soon with question marks over whether Rachel Reeves can survive as chancellor.
One Labour source suggested: “Rachel is running out of friends. It is just not working.”
Others have suggested that if Sir Keir is to reverse the decision on winter fuel then Ms Reeves “would need to be replaced first”.
But questions remain over who would be a viable candidate to replace her in the Treasury. And another MP noted that Sir Keir has promised Ms Reeves will be chancellor until the election. And Downing Street has continued to stand by the chancellor.
It comes as new polling from The Times and Sky News – conducted by YouGov – put Reform UK at its highest recorded vote share, sitting seven points ahead of Labour.
Nigel Farage’s party was on 29 points, while Labour was on 22. Lagging behind were the Tories on just 17 points, while the Liberal Democrats were on 16.
The anger over the local election results and the fear of Reform seizing power at the next election has brought despair to many MPs.
One MP told The Independent: “I’m not exactly experiencing the sunny uplands at the moment.”
Another darkly added: “It feels very Weimar Republic at the moment. Post hyperinflation, but pre Nazi.”
Meanwhile, the Red Wall group of Labour MPs, made up of around 45 MPs from Red Wall constituencies, warned that Sir Keir’s response that he would “go further and faster” in delivering his plans had “fallen on deaf ears”.
They warned that voters across the UK had told the Labour Party “loudly and clearly that we have not met their expectations”.
“Responding to the issues raised by our constituents, including on winter fuel, isn’t weak it takes us to a position of strength,” a statement added, urging the prime minister to “break the disconnect between Westminster and the Red Wall areas”.
The Red Wall is made up of areas in the Midlands and Northern England which have typically supported the Labour Party.
On Tuesday, the prime minister acknowledged his government needed to “explain the decisions that we’ve taken” after a “disappointing” set of election results, but his press secretary said the government will not be “blown off course”.
While there were reports the government was considering whether to increase the £11,500 threshold over which pensioners are no longer eligible for the allowance, the prime minister’s official spokesperson ruled out such a move – saying there will “not be a change to the government’s policy”.
The spokesperson added that the decision “was one that we had to take to ensure economic stability and repair the public finances following the £22bn black hole left by the previous government”.
But there is mounting pressure from within his own party – and from the opposition benches – for Downing Street to U-turn on the issue.
Veteran Labour MP Diane Abbott urged the government to restore the winter fuel allowance in full, saying a review of the policy alone wouldn’t be enough for pensioners, nor would it be enough to “restore Labour’s battered reputation”.
Meanwhile, Labour peer and Welsh first minister Eluned Morgan warned she is “losing patience” with UK Labour, urging the government to have a rethink.
And former transport secretary Louise Haigh said Labour’s “unpopular decisions are overshadowing the good ones”, calling for the party to explore a wealth tax to win back voters following Reform UK’s success in the local elections.
Speaking to BBC Newsnight, the MP for Sheffield Heeley said: “I don’t think we can underestimate how catastrophic those results were last week for the Labour Party. I think the unpopular decisions are overshadowing the good ones..”
Labour MP for Leeds West, Richard Burgon, told Times Radio Labour cannot be “stubborn” on winter fuel payments, saying the policy was both “deeply unpopular” and wrong.
“If the government wants to show that it actually gets it, in the words of the prime minister, then the government must fully reinstate the winter fuel allowance, not just tinker around the edges. And we can’t be dragged, kicking and screaming, into rethinking on this policy”, he said.
The issue blew up in PMQs with Tory leader Kemi Badenoch going on the attack over cutting winter fuel payments while Labour MPs watched uncomfortably from the other side.
Meanwhile, Liberal Democrat deputy leader Daisy Cooper also piled in, saying the government’s refusal to change course was “a completely tone deaf” response to the local elections.
“The public are rightly furious at the government’s decision to rip vital support from millions of the most vulnerable, yet ministers simply are not listening”, she said.
The decision last July to restrict the winter fuel payment to the poorest pensioners was intended to save around £1.5bn a year, with more than nine million people who would have previously been eligible losing out.
But Cabinet ministers acknowledged the winter fuel payment decision had hit the party at the ballot box.
Asked whether the cut had been part of Labour’s poor electoral performance, business secretary Jonathan Reynolds said: “I think that has been a feature. I think the prime minister himself has said that and we’re not sugar-coating those results, they’re very challenging for us.”
