That the Tories left the country and our public services in a dire state is no surprise. In October last year, former shadow Chancellor John McDonnell MP wrote a report on exactly that: What’s in the in-tray of an incoming Labour Government?
We set out our concerns that to get public services, from the NHS to social care, from education to local councils, back on a functioning basis would require somewhere in the order of £70billion a year.
But on top of huge under-funding of public services for more than a decade, the staff shortages and the massive backlogs, including in the law courts and asylum system, as well as the NHS, the Tories had also left billions of pounds of unfunded spending commitments for the current financial year.
This is not just partisan politicking. The independent Office for Budget Responsibility, established by George Osborne when he was in No11, has this week initiated a review into Jeremy Hunt’s Spring Statement, highlighting concerns over “the transparency and credibility” of the figures supplied by the Conservative Government.
To respond to this state of affairs, the new Chancellor, Rachel Reeves, made a statement earlier this week on the economic inheritance faced by the Labour Government. In that speech, Reeves announced that the universal Winter Fuel Payment would now be means-tested – taking up to £300 away from more than 10million pensioners. She also said that the Government would not implement the social care cap due to apply from October 2025.
Reeves said she did not want to be making these cuts. But, and you can call me a cynic, I think Labour’s leadership may have been planning these cuts in advance.
In 2015, 2017 and 2019, the Labour election manifestos set out policies on the Winter Fuel Payment and on social care costs. The 2024 manifesto was silent on both.
Fixing the what?: Chancellor Rachel Reeves speaking earlier this week
The Winter Fuel Payment is a £200 payment to pensioners (£300 if over the age of 80) to help with the extra cost of heating homes in winter. It was introduced by the last Labour Government. It remained unchanged through 14 years of Conservative-led governments.
Around 1.6million pensioners who claim Pension Credit will still get the payment, but it is estimated that more than 800,000 pensioners on low incomes who are eligible for Pension Credit do not claim it, and so will also lose their Winter Fuel Payment.
Age UK has started a petition to keep the Winter Fuel Payment universal. In just two days, 75,000 people had signed the petition.
It says: “We believe as many as 2million pensioners who find paying their energy bills a real stretch will be seriously hit by this cut: those on low incomes who just miss out on Pension Credit, those with high energy needs because of disability or illness, the 800,000 who don’t receive the Pension Credit for which they are eligible.”
There are around 50,000 pensioners living in Croydon, the majority of whom – possibly more than 40,000 – are likely now to lose their Winter Fuel Payment. That will remove around £9million a year from the local Croydon economy.
The decision to attack universal pensioner benefits is causing some backlash and embarrassment for the new government. Darren Jones MP, Chief Secretary to the Treasury and effectively Reeves’ No2, has already met with concerned backbench Labour MPs to try to allay their concerns.
Money-saving expert: Martin Lewis has criticised the government’s heating payment decision
The influential financie broadcaster, Martin Lewis, has also condemned the move, saying “the Energy Price Cap is likely to rise 10% this October and stay high across the winter, leaving most energy bills nearly double those pre-crisis, at levels unaffordable for millions”.
If we have a particularly cold winter, and a spike in cold-related deaths, this could do long-term damage to this Labour Government.
It’s a very strange choice not to tax the rich (some of whom may be the wealthier pensioners) rather than remove a universal benefit from pensioners, some of whom are barely existing on around £200 a week (far less than full-time income on the minimum wage).
It’s also embarrassing for Labour. In November last year, Darren Jones wrote to the Conservatives, following rumours the Winter Fuel Payment might be cut, saying, “Pensioners mustn’t be forced to bear the brunt of Tory economic failure.”
And even Keir Starmer has tweeted a declaration: “My Labour Party will always be on the side of pensioners let down by the Tories”, specifically raising the case of a pensioner struggling to keep warm in winter.
You can watch the Good Housekeeping interview here:
And at Prime Minister’s Questions in May, Starmer, as the then Leader of the Opposition, challenged Prime Minister Rishi Sunak: “Last year the Prime Minister was apparently drawing up plans to remove the winter fuel allowance from pensioners… will he now rule out taking pensioners’ winter fuel payments off them?”
Another cut announced by Reeves this week was to scrap the social care cost cap, which would have capped people’s lifetime liabilities for their personal care.
In the election campaign, Wes Streeting, now the Secretary of State for Health and Social Care, said: “One of the things we have committed to is the cap on care costs.”
This pledge has now been abandoned. It means those requiring care due to conditions such as dementia will continue to face potentially catastrophic care costs.
Sir Andrew Dilnot, the academic who for more than a decade has been pushing for better social care policy, said he was “staggered” by Labour’s choice and found the U-turn “breathtaking” and “extraordinarily disappointing”.
Labour can rightly blame the Tories for the state of the public finances and public services.
But its own choices of how to resolve those crises are theirs to own.
- From 2015 to 2019, Andrew Fisher was the Labour Party’s Director of Policy under Jeremy Corbyn. Fisher is also the author of The Failed Experiment – and how to build an economy that works, and now writes columns for InsideCroydon, the i newspaper and is a regular pundit on BBC and Sky News programmes
Andrew Fisher’s recent columns:
- Planning and tax changes might suit delayed Westfield scheme
- Bringing the parties to book: manifestos are empty of promise
- ‘Those are my principles, and if you don’t like them… well, I have others!’
- If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at inside.croydon@btinternet.com
- Our comments section on every report provides all readers with an immediate “right of reply” on all our content. Our comments policy can be read by clicking here
- Inside Croydon works together with the Bureau of Investigative Journalism, as well as BBC London News and ITV London
