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Number 10 has said scrapping the winter fuel allowance for all but the poorest pensioners is now “not happening”.

Earlier on Friday, Sky News revealed the option was under live discussion between No 10, the Treasury and the Department of Work and Pensions as a way to claw back some taxpayer funds from the elderly.

The prime minister is expected to fight the next election on a pledge to keep the pension triple lock despite its spiraling costs, and has been looking at various options to cut back welfare spending as he looks to pave the way for pre-election tax cuts, while also remaining committed to the pensions triple lock at the next election.

One government figure told Sky News that while the option was part of conversations about how to find savings in the welfare bill, No 10 didn’t want to risk public speculation on such an “emotive” issue that had divided views across Whitehall.

“Mr Sunak was interested in the option, while the chancellor and work and pensions Secretary Mel Stride were less enthusiastic about means testing pensioner benefits,” according to one person familiar with discussions.

One source told Sky News No 10 believes officials in DWP or the Treasury leaked conversations around the winter fuel allowance in order to “kill it off”.

Government figures earlier told Sky News the prime minister “understands the politics” of the triple lock and knows he has no option but to recommit to it, given the importance of the pensioner vote to his campaign and the Lib Dem recommitment to the policy in recent days.

Labour is also expected to maintain the triple lock in its manifesto.

“Rishi understands the politics of the triple lock, although he thinks it’s far from fair from an intergenerational point of view, so he’s trying to redress that a little bit,” said one government insider.

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Another person familiar with discussions told Sky News earlier that if the government did decide to “keep the triple lock but take away the winter fuel allowance from rich pensioners. I think people will understand that and think it’s fair”.

Mr Sunak has so far refused to commit to honouring the triple lock – which increases pensions each year by whatever is highest out of average earnings, inflation or 2.5%.

However, insiders say it is inevitable that he will and is now trying to find other ways to offset the cost of the commitment, with the triple lock forecast to cost as much as £45bn a year by 2050.

Winter fuel payments go to about 8.4 million households and is forecast to cost £2bn this year, according to the Institute for Fiscal Studies. A small – and falling – proportion are in receipt of pension credit.

What is the winter fuel allowance?

The Winter Fuel Payment is a tax-free handout from the government to help people of pension age pay for their fuel and heating bills.

Ministers set a date each year that defines eligibility. For 2023/204, anyone born before 25 September 1957 could get between £250 and £600 to help pay for bills this winter.

The exact amount depends on things like age and whether other people in your household also qualify.

However, it does not take into account financial status, meaning even the wealthiest pensioners can receive the state benefit.

Pensioners can opt-out of receiving the payments, but last year the numbers doing so dropped. Charities said this showed even middle class retirees were struggling with rising energy bills.

Wealthy celebrities like Lord Alan Sugar have also complained about the difficulties in opting out and donated their allowance instead.

Some MPs have previously called for a means-tested system, but the idea has not become mainstream.

Carl Emmerson, deputy director of the IFS, said over the long-run, the cost of retaining the triple lock will dwarf the saving from even getting rid of the winter fuel allowance entirely, pointing out that since 2010, the triple lock has increased state pension spending by £11bn a year to date.

‘Slap in the face for pensioners’

Rachel Reeves, Labour’s shadow chancellor, said the Conservatives committed to keeping winter fuel payments and the triple lock in their 2019 manifesto.

“They should not be breaking those commitments”, she said. “One thing I would be doing if I was chancellor today would be to have a proper windfall tax on the huge profits that the big energy giants are making and use that money to help people with their bills.”

Liberal Democrat Work and Pensions Spokesperson Wendy Chamberlain MP said: “Scrapping the winter fuel allowance would be a slap in the face for pensioners facing soaring energy bills this winter.

“Rishi Sunak must be living on another planet if his thinks this is the answer to the country’s problems. Pensioners have worked hard and paid their taxes all their lives, they shouldn’t be made to pay the price for the Conservative Party crashing the economy. “

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A government spokesperson earlier said the government was committed to the triple lock and said it would not comment on speculation ahead of its annual autumn review of benefits and pensions.

“We have protected pensioners with the biggest State Pension increase in history this year as well as boosting Pension Credit – worth around £3,500 a year for those on the lowest incomes,” the spokesperson said.

“On top of Winter Fuel Payments, pensioners will get another £300 this winter to help with essential costs, and we are bearing down on inflation to make everyone’s money go further.”

But officials also noted that there are 200,000 fewer pensioners in absolute poverty than in 2009/10, with the basic state pension over £3,050 a year higher than in 2010.

Winter fuel allowance is only one spending area the government is looking at ahead of the autumn statement in November.

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Lib Dems vow to protect triple lock

One figure told Sky News that the Department of Work and Pensions is also considering whether to cut working-age benefits in real terms ahead of the general election as the PM looks for space to create tax cuts. This could mean breaking the link with updating benefits in line with inflation.

PM looking for space to create tax cuts

The prime minister wants to be able to offer tax cuts in the run-up to the election, with one minister suggesting that scrapping the second leg of HS2 as well as a real-term cut in benefits might give the PM more room to do this.

One option being discussed is whether to increase the threshold for paying inheritance tax from £1m to £1.5m in order to appeal to middle-class voters in more affluent counties.

“It might be helpful in some seats,” said a figure familiar with discussions, who said scrapping the tax completely carried political risk given it would be framed as a tax break for the very rich.

The issue of the rising tax burden is vexing many Conservative MPs and has been put squarely on the agenda on the eve of the Conservative Party conference after the IFS released analysis showing that Mr Sunak and Boris Johnson have overseen the largest set of tax rises since the Second World War, and will cost the equivalent of £3,500 per household.

The IFS also estimates that by the time of the next general election the tax burden will have risen to 37% of national income and also warns that the shift to higher taxes may never be reversed, piling the pressure on the prime minister to cut taxes as his party gathers in Manchester this weekend for its annual party conference.

Pressure from Tory MPs

Former Prime Minister Liz Truss, who is due to attend the Great British growth rally fringe in Manchester on Monday, alongside former cabinet ministers Priti Patel and Jacob Rees-Mogg, said on Friday: “We should always be seeking to reduce the tax burden, especially when there is so much pressure on family budgets.

“This unprecedentedly high tax burden is one of the reasons that the British economy is stagnating and why we need to cut taxes to help make Britain grow again.”

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Tories ‘believe in low tax’ – MP

Another senior Conservative MP said some colleagues were in despair over Mr Sunak’s leadership and refusal to cut taxes. “We had a majority of 80 and now we’d be lucky to get a majority. We need to demonstrate Conservative values to make sure people can keep more of their money.”

Treasury minister Andrew Griffith told Sky News the government still believes in “reducing the tax burden” but their priority is bringing down inflation.

Asked if we can expect some tax cuts before the next general election, he said: “No, that’s absolutely not what I’m saying and I think any responsible treasury minister wouldn’t come on your programme this morning and make specific commitments.”

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The cost of innovation — Regulations are Web3’s greatest asset

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The cost of innovation — Regulations are Web3’s greatest asset

The cost of innovation — Regulations are Web3’s greatest asset

Opinion by: Hedi Navazan, chief compliance officer at 1inch

Web3 needs a clear regulatory system that addresses innovation bottlenecks and user safety in decentralized finance (DeFi). A one-size-fits-all approach cannot be achieved to regulate DeFi. The industry needs custom, risk-based approaches that balance innovation, security and compliance.

DeFi’s challenges and rules

A common critique is that regulatory scrutiny leads to the death of innovation, tracing this situation back to the Biden administration. In 2022, uncertainty for crypto businesses increased following lawsuits against Coinbase, Binance and OpenSea for alleged violations of securities laws.

Under the US administration, the Securities and Exchange Commission agreed to dismiss the lawsuit against Coinbase, as the agency reversed the crypto stance, hinting at a path toward regulation with clear boundaries.

Many would argue that the same risk is the same rule. Imposing traditional finance requirements on DeFi simply will not work from many aspects but the most technical challenges.

Openness, transparency, immutability, and automation are key parameters of DeFi. Without clear regulations, however, the prevalent issue of “Ponzi-like schemes” can divert focus from effective innovation use cases to conjuring a “deceptive perception” of blockchain technology. 

Guidance and clarity from regulatory bodies can reduce significant risks for retail users.

Policymakers should take time to understand DeFi’s architecture before introducing restrictive measures. DeFi needs risk-based regulatory models that understand its architecture and address illicit activity and consumer protection. 

Self-regulatory frameworks cultivate transparency and security in DeFi

The entire industry highly recommends implementing a self-regulatory framework that ensures continuous innovation while simultaneously ensuring consumer safety and financial transparency. 

Take the example of DeFi platforms that have taken a self-regulatory approach by implementing robust security measures, including transaction monitoring, wallet screening and implementing a blacklist mechanism that restricts a wallet of suspicion with illicit activity. 

Sound security measures would help DeFi projects monitor onchain activity and prevent system misuse. Self-regulation can help DeFi projects operate with greater legitimacy, yet it may not be the only solution.

Clear structure and governance are key

It’s no secret that institutional players are waiting for the regulatory green light. Adding to the list of regulatory frameworks, Markets in Crypto-Assets (MiCA) sets stepping stones for future DeFi regulations that can lead to institutional adoption of DeFi. It provides businesses with regulatory clarity and a framework to operate.

Many crypto projects will struggle and die as a result of higher compliance costs associated with MiCA, which will enforce a more reliable ecosystem by requiring augmented transparency from issuers and quickly attract institutional capital for innovation. Clear regulations will lead to more investments in projects that support investor trust.

Anonymity in crypto is quickly disappearing. Blockchain analytics tools, regulators and companies can monitor suspicious activity while preserving user privacy to some extent. Future adaptations of MiCA regulations can enable compliance-focused DeFi solutions, such as compliant liquidity pools and blockchain-based identity verification.

Regulatory clarity can break barriers to DeFi integration

The banks’ iron gate has been another significant barrier. Compliance officers frequently witness banks erect walls to keep crypto out. Bank supervisors distance companies that are out of compliance, even if it’s indirect scrutiny or fines, slamming doors on crypto projects’ financial operations.

Clear regulations will address this issue and make compliance a facilitator, not a barrier, for DeFi and banking integration. In the future, traditional banks will integrate DeFi. Institutions will not replace banks but will merge DeFi’s efficiencies with TradFi’s structure.

Recent: Hester Peirce calls for SEC rulemaking to ‘bake in’ crypto regulation

The repeal of Staff Accounting Bulletin (SAB) 121 in January 2025 mitigated accounting burdens for banks to recognize crypto assets held for customers as both assets and liabilities on their balance sheets. The previous laws created hurdles of increased capital reserve requirements and other regulatory challenges.

SAB 122 aims to provide structured solutions from reactive compliance to proactive financial integration — a step toward creating DeFi and banking synergy. Crypto companies must still follow accounting principles and disclosure requirements to protect crypto assets.

Clear regulations can increase the frequency of banking use cases, such as custody, reserve backing, asset tokenization, stablecoin issuance and offering accounts to digital asset businesses.

Building bridges between regulators and innovators in DeFi

Experts pointing out concerns about DeFi’s over-regulation killing innovation can now address them using “regulatory sandboxes.” These dispense startups with a “secure zone” to test their products before committing to full-scale regulatory mandates. For example, startups in the United Kingdom under the Financial Conduct Authority are thriving using this “trial and error” method that has accelerated innovation.

These have enabled businesses to test innovation and business models in a real-world setting under regulator supervision. Sandboxes could be accessible to licensed entities, unregulated startups or companies outside the financial services sector.

Similarly, the European Union’s DLT Pilot Regime advances innovation and competition, encouraging market entry for startups by reducing upfront compliance costs through “gates” that align legal frameworks at each level while upgrading technological innovation.

Clear regulations can cultivate and support innovation through open dialogue between regulators and innovators.

Opinion by: Hedi Navazan, chief compliance officer at 1inch.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Kemi Badenoch does not rule out local coalitions with Reform after Thursday’s council elections

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Kemi Badenoch does not rule out local coalitions with Reform after next week's council elections

Kemi Badenoch has not ruled out forming coalitions at a local level with Reform after the council elections on Thursday.

Speaking to Sunday Morning with Trevor Phillips, the Conservative leader did however categorically rule out a pact with Nigel Farage’s party on a national level.

“I am not going into any coalition with Nigel Farage… read my lips,” she said.

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However, she did not deny that deals could be struck with Reform at a local level, arguing some councils might be under no overall control and in that case, “you have to do what is right for your local area”.

“You look at the moment, we are in coalition with Liberal Democrats, with independents,” she said. “We’ve been in coalition with Labour before at local government level.

“They [councillors] have to look at who the people are that they’re going into coalition with and see how they can deliver for local people.”

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She added: “What I don’t want to hear is talks of stitch-ups or people planning things before the results are out. They have to do what is right for their communities.”

In response, Nigel Farage said: “The Tories broke Britain nationally for 14 years, and their councils continue to break local communities with the highest taxes ever and worst services.

“Reform have no intention in forming coalitions with the Tories at any level.”

A total of 23 councils are up for grabs when voters go to the polls on Thursday 1 May – mostly in places that were once deemed Tory shires, until last year’s general election.

It includes 14 county councils, all but two of which have been Conservative-controlled, as well as eight unitary authorities, all but one of which are Tory.

In addition, there is one Labour-controlled borough being contested.

Ms Badenoch has set expectations low for the Tories, suggesting they could lose all the councils they are contesting.

The last time this set of councils were up for election was in 2021, when the Conservative Party was led by Boris Johnson who was riding high from the COVID vaccine bounce.

Despite not ruling out agreements between the Tories and Reform once the local elections have finished, Ms Badenoch has been at pains to stress she is against any kind of deal with Mr Farage at a national level.

On Friday she criticised talk of “stitch-ups” ahead of next week’s local elections and said she was instead focused on ensuring that voters have a “credible Conservative offer”.

Speculation that the Tories and Reform could join forces heightened after two senior Tories appeared to advocate for some sort of agreement between the two rival parties.

Robert Jenrick, the shadow justice secretary, was captured in a video recording leaked to Sky News vowing to “bring this coalition together” to ensure that Conservatives and Reform UK are no longer competing for votes by the time of the next general election.

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What leaked audio of Jenrick tells us

According to the excusive audio Mr Jenrick – who lost the Tory leadership campaign to Ms Badenoch – said he would try “one way or another” to make sure the two right-wing parties do not end up handing a second term to Sir Keir Starmer.

Mr Jenrick has denied his words amounted to calling for a pact with Reform.

Meanwhile, in an interview with Politico, Tees Valley Mayor Ben Houchen also suggested the two parties should join forces in some way.

“I don’t know what it looks like. I don’t know whether it’s a pact. I don’t know whether it’s a merger… [or] a pact of trust and confidence or whatever,” he said.

“But if we want to make sure that there is a sensible centre-right party leading this country, then there is going to have to be a coming together of Reform and the Conservative Party in some way.”

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All of the other national parties have launched their campaigns for the local elections ahead of the poll next week.

Labour Cabinet Office minister Pat McFadden told Trevor Phillips that he was “not predicting huge Labour gains on Thursday”.

He also ruled out Labour striking deals with any other party.

“The deals on offer after Thursday won’t be between Labour and the Tories and Labour and Reform,” he said.

“But what there’s been a lot of debate about is what’s going to happen between the Tories and Reform, because I’m not even sure if they’re two different parties or one party at the moment.”

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Federal taxes to be ‘substantially reduced’ once tariffs set in: Trump

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<div>Federal taxes to be 'substantially reduced' once tariffs set in: Trump</div>

<div>Federal taxes to be 'substantially reduced' once tariffs set in: Trump</div>

United States President Donald Trump recently said that federal income taxes would be “substantially reduced” or potentially eliminated once the tariff regime fully sets in.

In an April 27 Truth Social post, Trump added that the focus of the purported tax cuts would be on individuals making less than $200,000 per year.

The US President also said that the “External Revenue Service” — a reference to funding the federal government exclusively through import tariffs instead of the current model of collecting taxes through the Internal Revenue Service (IRS) — is materializing.

Eliminating the federal income tax would likely be a positive catalyst for asset prices, including cryptocurrencies, as the increase in disposable income should partially flow back into productive investments. However, this stimulative effect is not guaranteed.

Taxes, US Government, United States, Donald Trump
Source: Donald Trump

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Trump’s plan leaves analysts and markets doubting

Trump previously floated the idea of eliminating the federal income tax in an October 2024 appearance on the Joe Rogan Experience, although Trump, who was on the campaign trail at the time, provided scant concrete details on the proposal.

The US President suggested that replacing the federal income tax with revenue from import duties would return the US to a time of prosperity seen during the Gilded Age, in the 19th century, when the US did not have a permanent federal income tax.

Research conducted by accounting automation company Dancing Numbers found that Trump’s proposal could save the average American $134,809 in lifetime tax payments.

Dancing Numbers added that the tax savings could be as much as $325,561 per American if other wage-based income taxes are also eliminated.

On April 2, Trump signed an executive order imposing sweeping tariffs on all US trading partners, which included a 10% baseline tariff on all countries and different “reciprocal” tariff rates on countries with import duties on US goods.

However, since that time, the Trump administration walked back its tariff policies several times, flip-flopping on tariff rates and when the tariff regime would fully take effect.

The Trump administration’s ever-changing rhetoric surrounding trade policies has heightened volatility in the US stock market, caused a rise in US bond yields, and has drawn widespread criticism from financial analysts who say the protectionist trade policies hurt capital markets while achieving little else.

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