UK's Starmer under pressure over cuts, donations at Labour conference

By Elizabeth Piper, Andrew MacAskill and Alistair Smout

LIVERPOOL, England (Reuters) -British Prime Minister Keir Starmer was under pressure on Sunday over his decision to limit winter fuel payments to the elderly and use donations for clothing and hospitality, far from the start he had hoped for at this year's Labour Party conference.

Starmer and his team had hoped the party's annual conference would be a celebration of Labour's return to power after 14 years of Conservative government, and a chance to set out how his team would tackle Britain's myriad problems.

Instead, Starmer and his ministers were again having to defend the decision to cut fuel payments to millions of pensioners and why the prime minister and others had accepted money from a donor to buy clothes and host parties.

It was a solemn start to conference in the northern English city of Liverpool, where Labour officials say Starmer and his team want to offer a vision of hope to Britain after repeatedly saying things would get worse before they got any better.

"Let me be blunt: we can't wish our problems away. We have to face them," Deputy Prime Minister Rayner said.

"But conference, things can get better if we make the right choices ... And we're fixing the foundations to put Britain back on the path to growth."

Not everyone was listening. Earlier on Sunday, the head of one of Britain's biggest trade unions called on Starmer to overturn his decision to limit the fuel payments.

Sharon Graham, general secretary of the Unite union which has more than 1 million members in Britain and Ireland, told Sky News she wanted Starmer to say the move was a misstep and reverse a policy that will means-test the payments which help some pensioners cover increasingly expensive fuel bills.

"It's a cruel policy. He needs to reverse it," Graham said.

Starmer says he was forced to make tough decisions after the previous, Conservative government left a 22-billion-pound ($29-billion) black hole in public finances - a charge the Conservatives deny.

BROKEN BRITAIN

Bridget Phillipson, education minister, said Graham was "entitled to her opinion" but the government was forced to push through the measures because of its fiscal inheritance.

"It was not a decision that we expected to make. It was certainly not one that we wanted to make."

The government says the move will save around 1.3 billion pounds in 2024/25 and then 1.5 billion a year in later years, funds necessary to spur economic growth.

But the stress on savings has jarred with the news that Starmer and some of his top ministers accepted donations to pay for clothing, for hosting parties and foreign travel.

Deputy Prime Minister Angela Rayner and Phillipson defended the donations on Sunday, saying they had abided by the rules and declared their use of the money. Starmer's office said on Friday the prime minister, Rayner and finance minister Rachel Reeves would no long accept donations to pay for clothing.

With a large majority in parliament, Starmer and his team believe they can weather criticism of policies in the short-term, hoping that by controlling spending they can be create the conditions for more investment and growth to benefit the public.

But with the government also suggesting its budget in late October will be "painful", Starmer has been criticised for overdoing the pessimism, causing consumer confidence to slump.

"I appreciate when everything at the moment seems really broken people really question when it can get any better and that is what we are determined to show this week," said Phillipson. "We will fix the economy and deliver a fair deal for everyone."

($1 = 0.7507 pounds)

(Reporting by Elizabeth Piper; Editing by Kirsten Donovan and Andrew Heavens)