Analysis: Rachel Reeves Has Been Left Humiliated By Winter Fuel U-Turn
She tried to put a brave face on it, but there is no doubt that the U-turn on her decision to remove winter fuel payments from 10 million pensioners is a humiliation for Rachel Reeves.
The chancellor confirmed today that she was raising the income threshold to qualify for the benefit, meaning millions more old folk will qualify for it this year.
Her climbdown followed a furious public backlash to the policy – and mounting anger among Labour MPs.
Reeves' reputation as an 'iron chancellor' has taken a battering from which it may never recover.
What's more, her explanation for why she has junked one of her signature policies does not stand up to a moment's scrutiny.
She told Sky News: 'I had to make urgent decisions last year to put the public finances back on a firm footing. We inherited a £22 billion in-year black hole in the public finances.
'I was always clear that the number one priority of this government was to return stability to the economy.
'We did that with a number of difficult decisions, but because of those decisions our public finances are now in a better position, which means that this year we're able to pay the winter fuel payment to more pensioners.'
But it is misleading in the extreme to suggest that, after 11 months of a Labour government, everything in the Treasury garden is now rosy.
Both the Office for Budget Responsibility and the OECD have downgraded their forecasts for the UK economy, not least because the impact of Donald Trump's tariffs have yet to take effect.
The idea that there is suddenly a load of spare cash to pay the £1.5 billion the winter fuel U-turn till cost is simply not true.
Indeed, Downing Street has admitted that we'll need to wait until the autumn Budget to find out how it will be paid for. How's that for a fiscal black hole?
On Wednesday, Reeves will announce how much money each government department will have to spend over the next three years as she unveils the result of her spending review.
She was already under huge pressure to explain how she plans to make the government's sums add up.
The winter fuel shambles means she has even less room for manoeuvre.
Revealed: Which Pensioners Will Get Winter Fuel Payments Again After Labour U-Turn
Rachel Reeves Confirms More Pensioners Will Get Their Winter Fuel Payments This Year
'Cack-Handed': Laura Kuenssberg Slams Labour's U-Turn Over Winter Fuel Payments
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
33 minutes ago
- Yahoo
Rachel Reeves may have just killed Nato
There will be a moment, some time in the next few years when the US will genuinely consider leaving Nato. And if it does, we should not be surprised. It wasn't as if they didn't warn the rest of us. About the only thing Donald Trump and Barack Obama ever agreed on was that Europe must make a much bigger financial contribution to Nato. In 2014 at the Cardiff Summit, the Treasury furiously resisted the demands. All sorts of tricks were pulled and definitions were stretched to get the UK to 2 per cent of GDP. The Americans, in their polite way, asked nicely. They've been asking ever since. Because as they command all Allied forces in Nato they knew the truth about the state of everyone's forces. While public scrutiny was kept at bay using secrecy and 'operational reasons', SACEUR – Supreme Allied Commander Europe, the military boss of Nato and always an American – grew increasingly concerned as Russia got more and more aggressive. And still European capitals, including London, carried on cutting. Not until 2019 and Boris Johnson did the Ministry of Defence turn the corner with real money and real reform. Previous Conservative and Labour governments had used the Red Arrows and Trooping the Colour to pretend that all was well. But Ukraine found us out. Nato and the international community needed to act: and as we examined our inventory ministers could see just how weak we had become. I remember when we debated gifting the AS90 155mm long range artillery to Ukraine I was informed that while we had 73 guns on the books only 19 worked! Or when I tried to increase the number of tanks to be upgraded to Challenger 3s I was told it was impossible because so many of our tanks had already been stripped of parts to keep others running. You might say that I should have known all that detail on day one. But you'd be surprised how well the services can hide bad news when they want to. Last week we witnessed Labour's first defence review for more than 20 years. It was heralded by re‑announcing many Conservative procurements. As a review it was weak: clearly budget-led not threat led. The big decisions had been made beforehand, and without 3 per cent by 2030 the review would clearly be hollow at birth, as it was. It was also an insult to the men and women of the Armed Forces and the equivalent of sticking two fingers up to the White House. Today's spending review confirmed what we all feared. Rather than making tough decisions on public spending priorities, Rachel Reeves chose to use Treasury tricks to deceive us all. The Government has folded in intelligence spending, Ukraine spending and even Foreign Office money to the notional 'defence' figure. The result is that core defence spending will not even be 2.5 per cent as promised: not even close. There was no path to 3 per cent either. It was just a con all along. If John Healey spent as much time battling the Treasury as he did repeating my government's plans or deceiving the public with spin then he might have had some success. But it is clear he is Labour first and UK defence second. How dare this Government avoid the solemn duty to defend our shores and properly equip the men and women of the armed forces. Labour was the government that sent our troops to war in Snatch Land Rovers and they are destined to repeat that betrayal. Next week Donald Trump will arrive in Holland for the Nato summit. He will bring with him a message that we must all spend 3.5 per cent of GDP on actual defence, not counting spies or diplomats. The Donald will not be bought off with Treasury tricks. I was in Washington last week and some very senior people in the White House and the Pentagon genuinely believe Trump may leave Nato in two years. They are serious. So we need to either demonstrate we are pulling our weight or we need to compensate for the 70 per cent loss to Nato capability if the US leaves. Based on Rachel Reeves's efforts we will do neither. History may point to this as the moment when the UK surrendered its place in Nato and triggered its demise. And all the while, Putin and Xi will be licking their lips. Waiting for their moment. For that little bit of Estonia or Finland. The best Donald Trump can do next week is say that Nato is a club with a subscription. No money should mean no entry. Ben Wallace served as Secretary of State for Defence from 2019 to 2023. He is a former British Army officer Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
34 minutes ago
- Yahoo
Welcome for housing pledge - but is it too late for some?
Danielle has moved four times in the last nine months with her three children. They became homeless after receiving a section 21 "no fault" eviction order from their landlord, and since then their local council has placed them in a shared house, as well as in hotel rooms. Despite the government's promises to fund more affordable and social housing, Danielle told the BBC she doesn't expect a council house to become available "any time soon". In Wednesday's Spending Review, Chancellor Rachel Reeves announced her plan to deliver the government's manifesto pledge to build 1.5 million new homes this parliament. The government committed to spend £39bn across 10 years for social and affordable housing in England - a move described by many social landlords and housing charities as a game-changer. Many parts of the country currently face an acute shortage of affordable and social housing. London's social housing waiting lists are at a 10-year high, according to analysis of government data by London Councils published earlier this year. The government says this investment, amounting to an average of £3.9bn a year, will be "significantly higher than what the previous government spent on affordable housing, which was an average of £2.3bn per year". Affordable housing is a wide-ranging category which includes properties let at rents of no more than 80% of local market rates, as well as shared ownership homes and social rent properties which are set at about 50% of market levels. More detail - including where the homes will be built, who will build them, and how much funding will be allocated to building socially rented homes - is still awaited. Seven ways the Spending Review affects you What has the chancellor has announced? The key points Watch: Where the money is being spent Danielle says the government's announcement feels "too late" to help her family now - but she hopes it means better chances for her children in the future. For her a permanent home "would be everything, everything". "It's security for my children, it's to know that we are never going to be put in a position like this again." Being moved every few weeks has been extremely disruptive. "It's been awful, absolute hell, it's turned all of our lives upside down. My children are constantly having to readapt." She has now been moved to temporary accommodation 18 miles from their school. "My children have to be up so early, at 5am, and then are expected to give 100% at school." You could almost hear the sigh of relief from social landlords when the billion-pound housing investment was announced. Many had warned that without significant funding and certainty, the government would never reach its housebuilding target. The government has also guaranteed how much social landlords will receive in rents over the next 10 years, meaning housing associations can plan how much they have to invest in building. Kate Henderson, head of the National Housing Federation, described the announcement as "transformational" and "the most ambitious Affordable Homes Programme we've seen in decades". Charlie Trew, head of policy at Shelter, agrees this is a "a really big moment" for the sector, but said the government needs to set a "clear target" for exactly how many social rent homes are planned. "The issue with so-called 'affordable housing' is that often it's not affordable at all and priced out of reach of people on low incomes," Mr Trew told the BBC. Shelter analysis shows that in more than four in 10 local authorities in England, a one-bed "affordable rent" home is "unaffordable for an individual on low pay", Mr Trew added. For this reason, he said it was important for the government to set a social rent target that would "focus this funding on social rent so that the cash delivers genuinely affordable social rented homes with rents tied to local incomes." Meanwhile, housebuilders said that while the announcement was good news in the long term, they were hoping for a boost now for the wider housing sector - such as a reintroduction of the help-to-buy scheme. Neil Jefferson, CEO at the Home Builders Federation, said that a year into the new parliament, housing supply and investment were "still lagging well behind where they should be". "This will likely persist until government grapples with the challenges being faced by prospective first-time buyers trying to get on the housing ladder," he said. 'Constant stress': Families tell BBC of life in limbo due to housing crisis Key points at a glance from the Spending Review Rachel Reeves outlines boosts for NHS and housing
Yahoo
an hour ago
- Yahoo
Reeves announces £6 billion to provide millions of NHS tests and procedures
Rachel Reeves has announced a £6 billion investment to speed up tests and treatment within the NHS, after setting out huge year-on-year rises in the health service's budget. New scanners, ambulances and urgent treatment centres are among the things which the additional cash will pay for, with the aim of providing up to four million more tests and procedures over the next five years. The announcement comes after the Chancellor put NHS funding at the heart of her spending review on Wednesday, raising its budget in a move worth £29 billion a year. This comes, however, at the expense of other areas of public spending. The new £6 billion funding will help to meet the Government's target of reducing NHS waiting lists in England, the Chancellor claimed. 'Over a decade of underinvestment from the previous government put the NHS on its knees, with people across the country unable to get the care they need. We are investing in Britain's renewal, and we will turn that around,' Ms Reeves said. She added: 'Part of our record investment will deliver four million tests, scans and procedures, so hard-working people can get the healthcare they and their families need. 'There is no strong economy without a strong NHS, and we'll deliver on our Plan for Change to end the hospital backlog, improve living standards and get more money in people's pockets.' The latest spending commitment will help patients get access to diagnostic scans and treatment in places such as shopping centres and high streets, speeding up their diagnoses. The Government hopes this will help to cut NHS waiting lists, meeting Labour's goal of ensuring the health service carries out 92% of routine operations within 18 weeks. Health Secretary Wes Streeting said: 'Since taking office we have been relentless in our drive to cut waiting times for patients, delivering over 3.6 million extra elective care appointments and reducing the overall waiting list by over 200,000. 'The £6 billion investment we are announcing today will generate millions more vital diagnostic tests, scans and procedures for patients across the country.' On Wednesday evening, Ms Reeves said the Government was 'confident' it could meet its pledge to reduce waiting lists after giving the NHS a 3% annual increase in funding at the spending review. Some health leaders are, however, sceptical that the Government will meet its target, despite the funding boost provided at the spending review. Matthew Taylor, chief executive of the NHS Confederation, which represents all health organisations, warned 'difficult decisions will still need to be made as this additional £29 billion won't be enough to cover the increasing cost of new treatments, with staff pay likely to account for a large proportion of it'. He added: 'So, on its own, this won't guarantee that waiting time targets are met.' Sarah Woolnough, chief executive of the King's Fund charity, said: 'The Chancellor said she wants the public to have an NHS there when they need it. 'It is hard to see how all the things she mentions: faster ambulance times, more GP appointments, and adequate mental health services and more can be met on this settlement alone. 'Particularly when large parts of this additional funding will be absorbed by existing rising costs, such as the higher cost of medicines, which are currently being negotiated, and covering staff pay deals.'
