LABOUR is set for a conference showdown over austerity on Monday as delegates prepare to vote on the government’s cruel cut to the winter fuel allowance for 10 million pensioners.

Unite general secretary Sharon Graham, who will move the critical motion, warned today of Labour introducing “austerity 2.0.”

Labour’s affiliated unions are under pressure to vote against the government on the controversial cut, which Fire Brigades Union leader Matt Wrack called “politically inept.”

Speaking to the Star, Ms Graham spelt out the case against the cut, which is the callous centrepiece of the Starmer government’s plan to balance the books on the backs of the poor.

“The richest 50 families in Britain are worth £500 billion, and Labour decided to take money off pensioners rather than tax the richest? Who makes that decision?” she asked.

Workers have paid the price through years of austerity since the 2008 crash, she pointed out.

“So we don’t want to hear from them that everyday people should tighten their belts, prepare for a second round of austerity. That’s just not acceptable,” she said.

“The fiscal rules are like a noose around our neck. We need to invest in business, in industry, in public services that have been absolutely decimated.”

RMT general secretary Mick Lynch told a fringe meeting: "It’s got to start with Rachel Reeves changing her position. If you use Tory fiscal measures you’ll get Tory results."

The winter fuel row is the most serious of several controversies which have sucked a lot of the air out of what was expected to be a celebratory conference coming less than three months after Labour’s election victory.

There is also deep embarrassment among party activists over the sleazy free suits and dresses and event tickets for Sir Keir Starmer, Chancellor Rachel Reeves, Deputy Prime Minister Angela Rayner and others, including Lady Starmer. 

After days of bad headlines, the party has announced that going forward its leaders will pay for their own clothes.

And there are destabilising media leaks about Sir Keir’s chief of staff Sue Gray, focusing on her inflated salary and her apparently endless disputes with other senior Downing Street aides.

Ms Rayner was sent out to rouse the mood on the first day of conference with a speech focusing on Labour’s most popular policies — workers’ rights, housebuilding and devolution — which are also her areas of responsibility.

She won warm applause for her pledges on employment law, which are still subject to tense last-minute negotiations with trade unions as the employers’ lobby tried to have them watered down.

“We are on the verge of historic legislation to make work more secure and more family friendly,” Ms Rayner said.

Labour would “go further and faster to close the gender pay gap, ensure rights are enforced and trade unions strengthened, she said.

“That means repealing the Tories’ anti-worker laws and new rights for union reps too,” she said. “A genuine living wage and sick pay for the lowest earners. 

“Banning exploitative zero-hour contracts and unpaid internships.  Ending fire and rehire and we will bring in basic rights from day one on the job.

“This is our Plan to Make Work Pay — coming to a workplace near you.”

On housing she promised to “get Britain building and building decent homes for working people. 

“A new planning framework will unlock the door to affordable homes and provide the biggest boost to social and affordable housing in a generation. 

“Our renters’ Bill will rebalance the relationship between tenant and landlord and end no-fault evictions — for good.

“Our long-term plan will free leaseholders from the tyranny of a medieval system.  And a cross-government taskforce will put Britain back on track to ending homelessness.”

While delegates lapped up Ms Rayner’s address she was followed to the rostrum by campaign chief Pat McFadden, who has the demeanour of an undertaker on overtime, and claimed that the government’s message was not “gloom” but merely “serious.”

It was left to Commons leader Lucy Powell to invoke the spirit of Corbynism, surely inadvertently, when she told conference that politics “can work for the many, not the few.”

Pensioners affected by the cut to the winter fuel allowance will protest at the conference on Monday.

The protest is part of Unite’s Defend the Winter Fuel Payment Campaign and will take take place at 1pm at The Wheel of Liverpool, at the city’s docklands.