Latest news with #winterfuelallowance
Telegraph
10 hours ago
- Business
- Telegraph
Starmer and Farage have doomed Britain to a spiral of decline
The Government's decision to U-turn on the winter fuel allowance is absurd – and, sadly, a big indicator that Reform UK is not going to be the party which breaks Britain out of its spiral of self-inflicted decline. Rachel Reeves plans to restore the WFA to all pensioners with an income up to £35,000 a year. It will then be clawed back from the wealthiest retirees via the tax system. Overall, around 7.5 million older people who missed the payment last year are set to receive it again – at an apparent cost in the region of £1.25 billion a year. Paul Johnson, the Chair of the Institute for Fiscal Studies, puts it well: 'It wouldn't even be in the top 100 of things that I would do with my £1.25bn if I wanted to act on poverty. Almost none of the people impacted by this will be in poverty.' He's right. The Government's decision to means test the WFA removed the payment from some ten million people; of these, its own analysis suggested that only 50,000 or so were placed into 'relative fuel poverty'. And remember, 'relative poverty' is merely an income inequality metric; it doesn't mean someone is necessarily unable to afford heating. Even on the face of it, therefore, Reeves is hosing money at 7.5 million people for the sake of lifting just 50,000 out of 'relative' poverty. But closer consideration of the numbers reveals even deeper absurdities. Take the income requirement of £35,000. From the off, that is only a couple of grand less than the national average wage of £37,430. Why should pensioners on that income receive a fuel payment when working-age people on similar incomes do not? If anything, those working-age people are more deserving of help – for their cost of living is often substantially increased by costs from which many pensioners are exempt. How many of those 7.5 million beneficiaries, for example, are living mortgage-free? Retirees are also exempt from National Insurance, and that has big implications for their real income. Without NICs, that £35,000 becomes about £2,500 a month post-tax; for a working person to be in a similar position, they would need to earn quite a bit more than the average wage (enough to be in the top 37 per cent of earners, or thereabouts). Pensioner poverty was a real problem in 2010, when the Coalition Government first introduced the Triple Lock. But whilst there are some struggling pensioners today, it is absurd that the State continues giving indiscriminate welfare to what has become, on average, this country's wealthiest age cohort. Our pathological inability to cut entitlement spending, even to people who obviously don't need it, is one of the main reasons our country is in such a sorry state. We are all but conducting a controlled experiment in how much of the state can be all but dismantled – prisons, courts, the military – in order to avoid touching the big revenue expenditure accounts. Arresting British decline will require breaking out of this cycle. But it's a prisoner's dilemma for politicians: try to do the right thing, as Theresa May did on social care, and it creates an all-too-tempting opening for opportunistic opponents to exploit – as Labour did then, and as Reform UK has done now. Now forced to govern in the long shadow of wildly unrealistic voter expectations, Labour is probably quietly regretting its game-playing over the 'dementia tax'. If Nigel Farage ever becomes prime minister, and is forced to admit the extravagant savings he claims he can get from abolishing DEI and net zero are for the birds, he may well regret killing off such an obvious cut as the winter fuel allowance.
BBC News
10 hours ago
- Politics
- BBC News
Ex-Labour minister says winter fuel U-turn smacks of incompetence
A former Labour minister from the Blair-era says the UK government's U-turn over the winter fuel allowance "smacks of incompetence".More than three-quarters of pensioners will receive the winter fuel payment after Chancellor Rachel Reeves confirmed she would roll back her decision to cut the Howells said the original policy was "daft" and that UK Labour ministers seemed to be "rudderless" and "floating around".The UK government was asked for comment. The former Pontypridd MP told BBC Radio Wales Breakfast: "The problem… is it smacks of incompetence. These U-turns don't look good, they never look good."This seemed to be kind of rudderless, floating around, not knowing which way to turn, and now they face this kind of humiliation, and really there was no need for it."It's true that people like me on a decent pension don't need it, but there are millions and millions who do need it."For a Labour government to be doing this just seems daft really."I'm afraid that this, along with a number of other decisions, has allowed people quite validly to level really very significant criticism at the government." Howells had a series of ministerial jobs under Tony Blair, including in the Foreign Office, before he was reshuffled out by Gordon Brown in 2008. He left Parliament in the radio interview Howells criticised the communication style of the prime minister."I don't understand anything Sir Keir Starmer says."It's this kind of London techno speak, which nobody understands."It's a mist instead of a clear policy, and that's what we need really. People need something to aim at, they need a hope, they need a future." He said Welsh Labour would "undoubtedly" pay the price for the UK government's actions - but Howells also criticised the Welsh government's former minister said devolution was designed "to make Wales better, but our health service is even worse than in England"."Welcome to Wales means you get all those tunnels in Newport," he said, referring to the 2019 scrapping of plans for an M4 relief road by former Labour first minister Mark Drakeford."We have to do much more than we have done at the moment."Howells complained about what he saw as the "curse of the Welsh Assembly" in calling for subsidies, using the original name for the Cardiff Bay legislature which was changed to the Welsh Parliament in 2020."It's not been about encouraging entrepreneurships and getting people to start their own businesses. It's been constantly about the old politics of 'we haven't had our share, we must get our share'."Asked about the row over whether Wales would benefit from funding for the Oxford to Cambridge railway line, he said: "Sure, that public investment is very important."But I don't think that's going to sort out transport problems in Wales or the future of Wales."It needs this outfit in Cardiff, it needs Keir Starmer's government in London, to realise that the world is changing at a fantastic pace and we've got to change with it."
The Guardian
13 hours ago
- Business
- The Guardian
Ed Miliband says Reeves ‘deserves credit' for winter fuel payment U-turn
Rachel Reeves 'deserves credit' for her U-turn on winter fuel allowance, Ed Miliband has said while denying that it was wrong to make the initial cut. The Treasury announced on Monday that it would restore the allowance to all pensioners with an income of £35,000 or less a year, amid public outrage over cut that was the first act of the Labour government. Reeves had previously removed the benefit from all but the poorest pensioners – those on pension credit. The decision has drawn criticism from those who have pointed out the relative wealth of pensioners and that couples with a joint income of £70,000 will receive it. The U-turn has also emboldened backbenchers who have been pushing for more action to tackle child poverty, with the government facing intense demands to lift the two-child limit, which experts blame for worsening deprivation. Speaking on BBC Radio 4's Today programme, Miliband, the energy secretary, said it was the right thing to do to change course but denied the government was wrong to take the initial decision. 'We've changed the threshold listening to the strength of feeling that people had,' he said. 'I think Rachel Reeves deserves credit for that. She's heard the strength of feeling that people have. She said it can be accommodated within our overall fiscal figures, and that's why she's made the change.' Asked if the initial change was a mistake, Miliband said: 'No, she took a whole series of decisions to stabilise the nation's finances. Just put yourself in the shoes of the chancellor. She came into office confronted by a whole series of spending commitments that the last government had made, which they had no idea how they were paying for. 'And she was being told, you've got to take action to show that we're going to stabilise the nation's finances. She initially [did] winter fuel, then she did a whole series of other changes in the budget … that's the context for this.' He also defended Reeves setting out how the government would meet the cost later this year at the budget. 'It's perfectly normal for a chancellor to set out at a fiscal event … how all the figures add up. 'This is a relatively small amount of money, and the chancellor [took] a whole series of decisions in the budget last autumn, some of which people have complained about, tax rises on business and the wealthy, to create the room for manoeuvre, to make the change in the threshold that she did.' Miliband announced on Tuesday that the government would spend £14.2bn funding the building of Sizewell C nuclear power station, saying it was the first time a government had backed the nuclear expansion plan by laying out how they would pay for it. 'We're actually putting forward the money to make it happen. This is the biggest investment in new nuclear in more than half a century in Britain,' he said. The announcement comes as part of the £113bn of new capital investment Reeves will set out in the spending review that the Treasury hopes will be the key theme – and enough to stave off further disquiet over expected cuts to day-to-day spending. The green light for the development at Sizewell C marks the end of a long 15-year journey to secure investment for the plant since the site was first earmarked for new nuclear development in 2010. Miliband said there would be no future Chinese investment in this development. 'It's majority public investment in Sizewell C,' he said. 'We're going to get some private investment but obviously that always goes through national security checks about making sure that any bidders, any parties to this, are people you would want as part of your nuclear power station.'
The Guardian
a day ago
- Business
- The Guardian
Reeves struggles to explain the genius of Labour's winter fuel payment U-turn
Mmmm. That went well, didn't it? One of the first things Labour did after winning the election was to cut the winter fuel allowance (WFA) for most pensioners. To show that they were strong. A signal to the bond markets that they would take the tough decisions to balance the Treasury books. And it was just one of those things if a handful of old people decided to die of hypothermia. They were dying in a good cause. Pour encourager les autres. Let no one take being warm for granted again. Time for some proper pensioner gratitude. After that, things started to unravel. MPs on all sides of the house – not least the Labour benches – began to ask whether this was the sort of policy a Labour government, any government come to think of it, ought to be introducing. Hell, the Tories had tried starving them with a cost of living crisis and now this? Rachel Reeves unconvincingly said the real aim was to make sure all those eligible for pension credit had claimed it but there would be no U-turns. Then came the U-turn. Two and a half weeks ago at prime minister's questions, Keir Starmer announced the reverse ferret. Something that everyone other than Kemi Badenoch heard clearly. Kemi isn't the quickest on the uptake. Now, on Monday morning – a couple of days before the spending review – came the details from the Treasury. Any pensioner with an income of under £35,000 would now be entitled to the WFA, starting this winter. Genius. It would be hard to create a bigger cock-up if you tried. Not just the denials of the U-turn followed by the inevitable U-turn. But the logistics. With the extra 100,000 people claiming pensioner credit, Labour has ended up with a bigger spending bill than if it had left the WFA as it was. Plus it has managed to dent its own economic credibility by not being able to explain how the £1.3bn extra cost will be paid for. Wait until the budget, we are told. Only just a few weeks ago, Reeves said she would live or die by balancing the books. The chancellor was out and about in north London trying to smooth things over on Monday lunchtime. When is a U-turn not a U-turn? When it's a Rachel U-turn. It was like this. She had originally made the spending cut to partially fill the black hole in the country's finances. Just one of those things. But then she had miraculously found that the economy was doing far better than expected so she was able to reverse her decision. She couldn't say how the country was doing better – she has yet to find anyone to back up this suggestion – but we should take her word for it. Any connection to the withdrawal of the WFA being unpopular was a coincidence. She was sorry but not sorry. Yeahbutnobutyeahbutno. Everywhere she went, lay the tell-tale sounds of burnt rubber. You could tell that Rachel wasn't having one of her best days. She looked confused. Embarrassed even. As if she couldn't quite believe some of the nonsense coming out of her mouth. A feeling confirmed by the fact she was nowhere to be seen when it was time for her to make a statement to the Commons. She had just checked her diary and had found there was a slurry of subsequent engagements. Nor was anyone else senior in the Treasury to be found to take her place. They too had found themselves unavoidably detained elsewhere. Appointments at the doctor. Unexpected open heart surgery. Anything. Any excuse will do. 'I've got a very important lunch. I can't cancel.' 'But the statement isn't until 4.15.' 'Ah, but it's a very long lunch. And then I have a coffee.' What goes around, comes around. In his time as head of the Resolution Foundation, Torsten Bell would have had a thing or two to say about the cuts to the WFA. None of them good. There was a Torsten once who didn't think killing pensioners was a good idea. But that Torsten was very much last year's Torsten. He has moved on since then. Wised up. But when he became a fresh-faced MP last year – Torsten looks about 12 – he was immediately promoted to the most junior role in the Treasury. One step up from the receptionist. So there was an air of inevitability when he was forced to take Rachel's place. Luckily, Torsten is hopelessly naive. Thinks there is an air of nobility in being made to look a halfwit. It's as if he was yet another ego straight out of Oxford who believes that he was born to rule. That the union was just a stepping stone to a life that will probably end up in the House of Lords. Monday was just a staging post. It's a brilliance that was almost entirely self-imagined. He managed to turn what was always going to be an embarrassment into a humiliation. All ersatz macho posture as he tried to pretend the U-turn was a clever piece of government time management. Hell, he even managed to make the shadow secretary of state for work and pensions, Helen Whately, look good. Something that never happens. She was prone to her own delusions – namely that it was the Tories that had forced the U-turn – but her main point was unarguable. Why no apology? Just say sorry. You've fucked things up, you're trying to fix it, let's move on. The story might then go away. But Torsten didn't apologise. Choosing instead to bluster for more than an hour. The kindest thing to do was to look away. Down in Port Talbot, Nigel Farage was also trying to take the credit for the U-turn. Though he was also trying to make it sound completely normal for someone to walk out of their job one day and walk back in the next. Zia Yusuf must be thrilled to be talked of as a temperamental teenager who had got cross with Daddy. Nige also observed that Yusuf had suffered loads of racist abuse. He forgot to mention that almost all of it had come from Reform UK supporters. Mostly, though, Farage was keen to reopen the steelworks that can't be opened to make a type of steel we don't use and to reopen the coalmines so that all those former miners who swore blind they wanted their kids to never go down the pits could tell their kids to do just that. The regeneration of Wales starts in the 1950s. Vote Reform. Back to the future.
Daily Mail
a day ago
- Business
- Daily Mail
Rachel Reeves' winter fuel U-turn has exposed depths of incompetence that are barely credible. This is why the political damage will be permanent, says STEPHEN GLOVER
Within weeks of Labour winning the election last July, Rachel Reeves announced the scrapping of the winter fuel allowance for all but the very poorest pensioners. The saving to the Exchequer wasn't great – about £1.5 billion a year, not much more than one per cent of public spending. Nonetheless, it has caused the Government enormous damage, which the Chancellor's ungainly U-turn yesterday is most unlikely to repair.
