Rachel Reeves's (partial) reversal of the winter fuel cut for pensioners was as much a nailed-on certainty you can get in politics. After the local elections drubbing and the continued erosion of Labour's base, something, anything had to be done to reverse the non-stop slide in Labour's fortunes since the general election. Pensioners on incomes lower than £35k, which is about three-quarters of them, will now receive the payment compared to 1.4m or so who qualified for the help last Winter. For all her talk of the iron-hard fiscal rules, Reeves has found they're flexible enough when occasion demands.
This has nothing to do with finding extra headroom because the economy is performing better. It's all about the politics. The first is the immediate consideration. With her big spending announcements due on Wednesday when departments will receive their multi-year settlements, the government - which are desperate for good news - will hope its commitments earns them praise from all quarters. They want the winter fuel albatross taken from around their neck, so getting ahead of the main event and giving the press something to splash on now - which their elderly readership won't fail to notice - clears the decks for the goodies to come. In other words, Reeves has ensured she won't be overshadowed by ... Reeves. With most pensioners sorted, the government are hoping this is going to be so much water under the bridge by 2029. Who's going to be carping on about this then when all the nice, shiny things will be in place?
They forget we live in a politics where memory lasts and the 1978-9 Winter of Discontent is still a factor for some. No one is going to forget that as soon as Labour got into office, they cut support for the elderly and decided keeping kids in poverty was fine and dandy, while they helped themselves to ministerial perks and freebies (all properly declared, of course). You never get a second chance to make a first impression, and no amount of right-wing posturing can repair the damage done. What might is action. If people see visible improvements in public services, wage packets and pensions going further, and the country looking and acting less mean and shabby Labour are in with a shout of turning it around. But unfortunately for them, their doomed efforts at trying to out-Reform Reform, cleaving to the right, and failing to push policies that might grow and consolidate their own coalition of voters - indeed, at times, actively attacking its natural support - makes this exceedingly unlikely.
No, Labour aren't about to be thanked for turning the clock back. "Doing the right thing" cannot erase the fact they did the wrong thing in the first place, and arrogantly paraded it about as a badge of toughness.
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And as has been pointed out the new approach to WFPs will cost more than if they had left things alone. Previously WFPs to all pensioners was delivered by around 20 staff. Now it takes hundreds to means test check. The new approach will also mean involving DWP and HMRC staff to check and deal with queries.
ReplyDeleteHope the Bond traders are still impressed by Rachel's tough decisions
The economy isn't doing that much better, growth was marginally better than expected in the previous quarter, before the influence of tax raids fully flush through from April onwards (the UK did do better than the G7, but that's a bit like claiming to run faster than a dead horse, it's not that impressive). But the winter fuel allowance was a drop in the ocean anyway, it's a big thing for those who genuinely need it, and for those who don't it will boost discretionary spending, which might not be a bad thing in current environment.
ReplyDeletePanorama recently aired a programme called 'Is Britain Broke?' that's well worth a watch (BBC iPlayer). It's fairly sober and unsensational analysis of the contentions of a public that expects the state to deliver ever more for them, whilst taxes and debt are at historically high levels, without going into the more contentious pros and cons of the different policy responses available.
I've got news for you, @Kamo, we are all bankrupt. The world of physical stuff depends on energy, and our whole 'advanced' lifestyle is built on easy access to cheap energy. It was a one-time special offer, courtesy of the geological processes that created coal, oil and gas. This left us with a stash of material easily converted into usable energy. From which we built...everything we have.
ReplyDeleteNow, all the cheapest, easiset sources have been used, and we are having to use more and more energy to extract it. This energy cost of energy has been inexorably going up. From around 2% 80 years ago, to about 11% now - and rising. This means, the good times are over. Because our idiot savants who run the world of finance have zero understanding of thermodynamics, they have yet to cotton-on. When they do, expect a complete collapse of banking and finance. All those bits of paper? Worthless. All those bits in a computer memory? Even more worthless.
So, yes, we are broke. But so is everyone else. It's just that we haven't realised it yet. When we do...worry.
The national debt thing is pish. It's simply the difference between money created and that taxed back, and is necessary for economic activity. It's been growing since 1694 and we haven't gone bankrupt. The tax thing is pish too, it's simply that we don't tax corporations, the rich, finance etc and while they hold or hoard without investing, economic activity is dulled. Reeves is a consummate liar or idiot, as what we want to do, we can - hence the billions suddenly appearing for war and busted tech like carbon capture. the only truth BTL is energy costs, and we are busy busting that with costing all power as gas, and building AI centres which EAT energy. There is another way, but it involves having leaders who aren't in the pocket of big business, techbros and foreign states.
ReplyDelete