Labour hopes to put winter fuel misstep behind them

[Pelican Press 0]

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Labour hopes to put winter fuel misstep behind them

The final act in this slow motion U-turn has played out.

The arc of this row runs to almost a year. It was late July last year when I was among a bunch of reporters called into the Treasury to question the then new chancellor about her out-of-the-blue policy to take the Winter Fuel Payment from millions of pensioners.

Rachel Reeves limited the payment to only those pensioners in receipt of pension credit or other means-tested benefits – around 1.5 million – saving up to £1.5bn a year.

Ever since Labour MPs have grumbled they’ve been taking heat for it.

Two-and-a-half weeks ago, the prime minister said the threshold would be moving.

Last week, the chancellor said the new recipients would get it this coming winter.

We now know who will qualify and who will have to pay it back.

A couple of thoughts: could the government have done this in the first place?

Some privately say: absolutely.

Others say there was genuinely real concern in the Treasury about the state of the books and they felt compelled to do something to reduce so-called in year costs.

Secondly: once they decided to move, they have moved pretty quickly, albeit announcing the U-turn in iterative steps, one week after another.

We are not being kept waiting until the Budget in the autumn, or even the Spending Review on Wednesday – here we have it, the new threshold.

So, how will the government pay for it? It is projected to cost £1.25bn.

Ministers say there won’t be a “permanent” increase in borrowing.

So how much borrowing will there be, and for how long? And which other budgets may be squeezed as a result?

For many within Labour this whole debacle was the single biggest misstep of the party’s first year in office.

They will now hope to put it behind them.

But it’s one of those things forever likely to remain in the biography of this government – with questions asked of Rachel Reeves about it.

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