UK's Starmer to defend spending cuts for elderly ahead of key vote

LONDON (Reuters) - British Prime Minister Keir Starmer will warn on Tuesday that he is prepared to take unpopular decisions on government spending ahead of a vote over controversial plans to cut payments which help millions of elderly people pay their heating bills.

Starmer is under pressure from trade unions, rival political parties and some of his own Labour lawmakers to reverse a decision to cut payments to the elderly. A vote in parliament on Tuesday to approve it could see his biggest rebellion since he took office, with some Labour lawmakers abstaining or voting against the government.

In a prepared speech to the Trades Union Congress (TUC), Starmer will tell unions, who are also pushing for above-inflation pay settlements to make up for a decade of public sector real-terms salary cuts, that his main priority will be on ensuring economic stability.

Starmer will say he is ready to pass reforms such as the repeal of anti-strike laws passed by the previous government, but will warn them they will have to accept restraint on public sector pay and government spending.

"I do have to make clear, from a place of respect, that this government will not risk its mandate for economic stability, under any circumstances," Starmer will tell the union leaders. "And with tough decisions on the horizon, pay will inevitably be shaped by that."

Elected in a landslide victory in July on a promise to rebuild Britain, Starmer has recently raised the possibility of tax rises and spending cuts to try to fix a myriad of problems he blamed on 14 years of Conservative misrule.

Labour has close links to unions, which founded the political party more than a century ago to represent workers. But demands for higher pay and maintaining or expanding some benefits clash with the government's attempts to keep a grip on Britain's strained public finances.

The government estimates the move to cut winter fuel payments will save the finance ministry 1.5 billion pounds ($1.96 billion) a year.

In the speech, Starmer will call for unions and businesses to work together and to accept trade offs to help the economy recover.

"I make no apologies to those, still stuck in the 1980s, who believe that unions and business can only stand at odds, leaving working people stuck in the middle," he will say.

(Reporting by Andrew MacAskill; Editing by Sandra Maler)