The government has insisted it will not reverse cuts to winter fuel payments, despite growing calls within Labour ranks for a rethink on the policy.

Calls within the party for the cuts to be abandoned have grown louder in the wake of losses at last week’s local elections in England.

But Sir Keir Starmer’s spokesman told reporters there “will not be a change to the government’s policy”.

He insisted last year’s move to restrict eligibility for the annual payments was required to “ensure economic stability and repair the public finances”.

It comes after the Guardian reported ministers were considering softening the effect of the cuts later this year.

Speaking to the BBC earlier, Health Secretary Wes Streeting insisted the winter fuel policy was not being formally reviewed.

But he added ministers were “reflecting on what the voters told us” at last week’s elections, where Labour lost around two-thirds of the council seats it was defending.

Streeting acknowledged many voters “aren’t happy” with the cuts.

Labour Welsh First Minister Baroness Eluned Morgan called on the UK government to “rethink” the policy in a speech on Tuesday, adding it “comes up time and again” with voters.

The winter fuel payment is a lump-sum amount of £200 a year for pensioners under 80, increasing to £300 for over-80s, paid in November or December.

Last year, the government restricted the payments to those who qualify for pension credit and other income-related benefits, in a bid save £1.4bn.

The move, which did not feature in Labour’s election manifesto, means around 9 million pensioners will no longer qualify for the top-up.

It has been seen as a key issue at last week’s elections, at which Labour lost 187 council seats and control of the only council it was defending.

The Guardian has reported ministers are considering raising the effective £11,500 earnings threshold to continue qualifying for the payment.

Some Labour MPs believe reversing the policy would provide the prime minister with a clear way to show the public he “gets it” – as he said said last week after the local election results came in.

But others closer to government thinking question whether there would be any political benefit to changing course at this stage, believing the political damage has already been done.

Former cabinet minister Louise Haigh, who resigned last year, has hit out at the winter fuel cuts, adding that they had become a “totemic” issue for many voters.

Writing in the Sunday Times over the weekend, she argued that winter fuel and proposed benefits cuts were “primary examples offered as to why the Labour government simply did not look like it understood their priorities”.

The move has also been opposed by unions and the main opposition parties.

Speaking to the BBC earlier, Streeting said he would not be “pretending that winter fuel didn’t come up on the doorstep, of course it did”.

“I know that people aren’t happy about the winter fuel allowance in lots of cases,” he said.

“We did protect it for the poorest pensioners, but there are a lot of people saying they disagree with it regardless.”

However, he also defended the move as part of a wider package of changes, that would provide the “means of raising the investment” in public services.

“Unfortunately when you look across the board at the breadth and depth of the multiple crises that we’ve inherited, in order to deliver the change that people voted for we have had to do heavy lifting at the Budget,” he added.

But Liberal Democrat Treasury spokeswoman Daisy Cooper said the government’s decision to rule out a change was a “tone deaf response” to last week’s polls.

The winter fuel payment was introduced in 1997 by New Labour as a universal payment for all pensioners.

It was billed as a way to guarantee they would be able to pay for increased heating costs over the winter – although in practice it is a pension top-up, which recipients can spend on whatever they want.

From 2010 onwards, the state pension gained additional protection under the “triple lock” policy – under which pensions go up each year by the highest of inflation, average earnings or 2.5%.

Last year the state pension went up by 8.5%, an annual rise of £691.60 for those on the full basic state pension or £902.20 for those on the full new state pension.

This year state pensions are going up by 4.1% – a rise of £363 a year for those on the basic pension or £472 for those on the new pension.