by Stoker
UK Chancellor of the Exchequer, Rachel Reeves
In April 2020 Sir Keir Starmer became Leader of the UK’s Labour Party and leader of Her Majesty’s Loyal Opposition. That means that, in spite of Rishi Sunak’s springing a surprise general election on the UK electorate (and no one was more surprised than the governing Conservative Party, whom Rishi seems to have overlooked informing of his intention), Keir had four years to get ready for government. And whilst it is never wise to tempt fate, it had been pretty obvious from April 2020 that Labour had a good chance of winning any election, and the chances just got more and more favourable as each month and each Tory prime minister swept by.
So, on the 5 July this summer, Labour swept into office all ready to go; meticulously- crafted plans ready to unfurl; researched, costed, and detailed polices all in good drafts; everybody briefed and ready to begin the great task of forming the first Labour Administration for 14 years.
Right? Wrong. Oh, for sure, for the first few days everything looked tidy and shipshape. Starmer was nice about Sunak. Sunak forbore from marching on the Cabinet Office to declare the election stolen and was very nice back to Starmer. Most Labour ministers, finding their new offices and support teams, were quietly positive and referred to the hard work ahead in these difficult times and their gratitude to the British people for entrusting them with the opportunity to build a fairer, kinder Britain.
Then the new Chancellor of the Exchequer, Rachel Reeves, announced that she had found a shortage in the petty cash – a £22bn shortage - and that she would need to be a little tougher than she had envisaged in her forthcoming budget with all the fat cats out there. The excitement or perhaps the worry then seemed to become too much for her (Ms Reeves is an ex-banker after all and bankers don’t like cash shortages). Her Ms Micawber side* took over, and she announced that to kick off the urgent austerity programme and plug the shortfall, the winter fuel payment would be abolished, immediately. Cue shouting and screaming on such a scale that nobody seemed to notice that she added “except for pensioners receiving pension credits or other supplementary benefits”.
For our readers who live outside the UK, or so rich that they do not pay heed to the bizarrely complicated system of benefits in the UK, we should explain that the winter fuel payment is a benefit payable in the autumn to all those of state pension age and over, to cover the costs of keeping warm in the winter. It was introduced by Labour Chancellor Gordon Brown in 1997 – one of his first acts as Chancellor – at a rate of half a crown or something similar. Enough to buy a small net of logs. Last year it was £300, enough to buy a small bag of coal (except it is illegal to buy coal for domestic use). You may think this payment is a patronising and utterly inefficient way of giving back to old people some of their own money, and you would be right. You might also think that it is pretty odd to pay such sums to all, no matter what their resources; to Dukes in their mansions and tycoons in their penthouses, and again, you would be right.
What Ms Reeves has done is sensible; she is restricting the payment to those who need it, those reliant on the state pension, which is not sufficient for any except the most frugal UK pensioner to live on. Abolishing benefits is always difficult politically. Politicians usually have some comfort up their sleeve, a positive spin on things. She could have announced that the payment would go up £100 for those eligible to receive it. Or that it would be abolished altogether and the state pension go up by £300 – giving the tidy result that those with private incomes would get taxed at their marginal rate on their increased income, so minimising the true net cost whilst she looked like a kindly chancellor. Or that it would be paid to those on state pension plus say maximum £2000 of other income to help those at the margin of eligibility.
But that was not the Reeves way. She instead approved a rise in pay for train drivers of almost 15%, followed by large salary rises for junior doctors and teachers. These are all admirable and useful people and no doubt feel themselves well overdue a pay rise – don’t we all – although one can’t help notice that train drivers pay is more akin to that of headmasters than nurses. But the timing of this generosity with the public money was appalling. If the intention was to distract from the restriction of the winter fuel payment, it was utterly cack-handed; the two things were instantly coupled together. And we reiterate that the amendment was easily defensible, the changes to eligibility for the winter payments were long overdue and have great merit. Apologies to Dukes and tycoons reading this, but really, you will manage without it. Or must learn to.
All that was needed was a robust, coordinated justification of what had been done, with a careful briefing of the media. But it seems that this was not a lacuna in a carefully-crafted programme of the new government. It increasingly appears that there is no carefully-crafted anything. The Foreign Secretary is going round the world upsetting our allies and obviously did not take the one-week basic diplomacy course he was presumably offered. Keir got himself in a bind removing Mrs Thatcher’s portrait from the room in which he works – why did he even mention something which was bound to make him look a nervous softie? Ms Rayner has been busy promising to achieve the probably impossible in house-building but without any detail as to how she might achieve this. And Mr E Milliband… Ah, Ed Milliband. Mr Milliband is going to make us all self-sustainably electrically-powered by 2030. Promise. Scouts honour. How? Don’t ask Ed, he has no idea and has been asking various participants in the power industry what they would do. Push the date back to 2050 seems to be the general feeling. But Mr M has promised 2030. In a world that has insufficient sources of power, power storage, and power transmission and no hope of making up the shortfall in any of them in the next twelve years. And, by the by, will need to destroy large swathes of countryside to get there. And even so Britain is likely to have major power outages in the next five years, as early as this winter if it should be a bad one.
There may be one outage earlier than you think. Mr Milliband shows all the signs of a fool being allowed his head temporarily, for the purpose of being sacked when Mr Starmer needs a major distraction from some other problem. One has visions of the Cabinet nodding and smiling as Ed sets out his targets and dreams, Ministers and senior civil servants catching each other’s eyes as Mr M attempts to log into his latest projections, they giggling ever so slightly as he fails to realise what his true role is. Whatever the word is for a Trojan horse that you push outside the city gate to distract the enemy, that’s our Ed. Ms Reeves though is no horse, she will not be so easy to budge; Keir must now prosper or fall with her.
*Mr Micawber, a character in Charles Dickens’ great novel David Copperfield, opined “Annual income twenty pounds, annual expenditure twenty-pound ought and six, result misery". A good Chancellor of the Exchequer will not overlook this maxim for long, if they wish history to remember them kindly
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