Rachel Reeves has ended the new Government’s honeymoon with the nation early following decision to cancel winter fuel payments for those over 66 - David Behrens

Seldom has a government taken money so directly from the pockets of one group of people to benefit another. But that was how the Chancellor chose to frame her decision to cancel winter fuel payments for everyone over 66 in order to fill a financial black hole that was getting deeper as she spoke.

The savings from seeing old people shiver would help balance the books left by her predecessor, said Rachel Reeves on Monday, minutes after handing workers right across the public sector above-inflation rises of between five and six per cent.

It was a curious first target for a new government. She could have shown intent by making an early raid on profligate corporations, tax avoiders or the culture of excessive bonuses; instead she chose the safe option of people whose only sin against society had been to grow old and whose expectations could be downgraded with upsetting the stock markets.

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And while she had a point that the automatic and indiscriminate nature of the winter fuel allowance meant it was being given to those who didn’t really merit it, the same was true of the pay rises she had just rubber-stamped.

Chancellor of the Exchequer Rachel Reeves arrives in Downing Street, London, for a Cabinet meeting. PIC: Jordan Pettitt/PA WireChancellor of the Exchequer Rachel Reeves arrives in Downing Street, London, for a Cabinet meeting. PIC: Jordan Pettitt/PA Wire
Chancellor of the Exchequer Rachel Reeves arrives in Downing Street, London, for a Cabinet meeting. PIC: Jordan Pettitt/PA Wire

The category of public sector worker is a very broad one. It takes in teachers, nurses, firefighters and many others who deserve every penny they get and a lot more. But it also includes hundreds of thousands of administrators and managers in overstaffed departments whose roles are questionable and performance lamentable.

These are the people whose job it was to plan for a pandemic and failed to do so; those who don’t pick up the phone when you try to call about your tax or your benefits; and officials who have never been inside a hospital yet whose job it is to inspect them. Worst of all, these are people who are supposed to manage roads and railways they don’t have to use because they’re still working from home and – irony of ironies – claiming tax relief for having to turn up the central heating as a result.

They are lucky to keep their jobs at all, let alone reap extra rewards for doing them badly. Yet they will all benefit from Ms Reeves’ largesse as she tries to justify capitulating to their unions on the grounds that further industrial action would cost the country even more in the long run.

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That may be a miscalculation; she might actually have triggered more strikes by unions who now see her as a soft touch. The PCS, which represents the majority of deskbound civil servants, is already complaining that although its members were handed a rise three per cent above inflation, some workers were getting half a per cent less than others.

That won’t cut much ice with those whose capacity to buy extra fuel this winter is now 100 per cent less – especially if they have come to rely on the annual windfall and budgeted accordingly. Last year, 11.4m people benefited in this way; this time eight out of 10 of them won’t see a penny.

Those who were formerly eligible include the likes of Elton John and the King, which illustrates why the payment could not continue to be made as indiscriminately as before.

But most former recipients, myself included, find ourselves on a scale somewhere between pop stardom and penury. The fuel allowance was a benefit we didn’t apply for and can manage without but was nevertheless a handy bonus, especially with the ridiculously escalating cost of gas and electricity.

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The loss might have been easier to stomach had it been accompanied by sanctions on the fuel companies who have profited at everyone else’s expense – and it was a mistake on Ms Reeves’ part not to signal such a move at the same time.

As it is, her action smacks of robbing Peter to pay Paul; of pilfering money from pensioners and handing it to pen-pushers. It ended the nation’s honeymoon with its new government in three weeks flat.

And it’s all very well to invoke the template excuse that the previous administration left a bigger mess than anyone had realised, but the black hole to which she alluded has been dug deeper by the cost of her own generosity.

Politics is about presentation as much as policy and you might argue that her decision not to sugar-coat her actions was a refreshingly honest change from the spin-doctoring that went on under Tony Blair and every administration since.

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But those pensioners who really will struggle to heat their homes this winter because they have fallen through whatever remains of the state safety net will see a black hole in their finances proportionately much bigger than Ms Reeves’ £22bn.

They will be expecting a tangible indication when she delivers her full budget on October 30 that she is after all on their side.

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