The benefits system is out of control
The decision to axe the winter fuel payment for most pensioners must rank among the most ill-judged policies introduced by a Chancellor in recent times, and there is strong competition for that accolade.
Rachel Reeves made the decision shortly after taking office because she said it was necessary to help plug a £22 billion 'black hole' she had discovered in the nation's finances.
Her argument might have had some merit had she not then blown much of the savings on pay rises for train drivers and public sector workers. The juxtaposition of help for Labour's union allies while pensioners shivered rapidly became toxic for the Government, generating one of the fastest reversals of support for any new administration.
In the end, with Reform advancing in the polls – and pledging to restore the payment – Sir Keir Starmer ordered a screeching U-turn which the Government maintains is possible because the economy is doing so well, as if anyone believes that.
Now, instead of around 1.5 million older people on pensioner credit receiving the payment, it will be paid to about nine million OAPs with an income below £35,000. Why this figure has been chosen is as much a mystery as other 'cliff edge' sums that abound in our overly complex tax and benefit system.
Indeed, this U-turn just makes it even more convoluted. Everyone will receive the payment but it will then be clawed back from an estimated two million people earning more than the £35,000 threshold via PAYE or a tax return.
In other words, yet more red tape will be imposed to make a quarter of pensioners return an allowance that began life in 1997 as a universal benefit. Although many better-off pensioners often said they did not need the money, and many gave it to charity every Christmas, at least it was straightforward.
To some extent so was limiting it to people on pensioner credit, since that is already linked to income. But what is now proposed is a dog's breakfast, with opt-outs and other implications still to be resolved.
Tomorrow, Ms Reeves will unveil her spending plans for the next four years. She is being urged to get a grip on the rapidly expanding benefits budget; but if this experience is to be our guide, there is little chance that it will ever be reined in.
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