Gordon Brown introduced the winter fuel payment shortly after becoming Chancellor of the Exchequer in 1997, following his party’s landslide victory. Rachel Reeves abolished the winter fuel payment shortly after becoming Chancellor in 2024, following her party’s landslide victory. Since others are shy of saying so, I want to point out that Mr Brown was wrong and Ms Reeves is right. The payment was a wasteful gimmick, addressing a problem better handled by the benefit system. If at least 80 per cent of the beneficiaries of something intended for the poor are not poor, the winter payment is ridiculous. Mr Brown loved such special devices because he instinctively liked to complicate welfare to create more dependency. For the same reason, he introduced free television licences for the elderly in 1999 (now also abolished). Ms Reeves is right that this government, if it sticks to its promise, will make all pensioners richer in this parliament by perpetuating the Tories’ triple-lock state pension – a much more sensible (though hideously expensive) system because most recipients will have paid for it, indirectly, through National Insurance over their working years.
Labour’s real problem is that it hid its intentions from the electorate, calculating – no doubt correctly – that the uproar in the campaign would have been huge. Now it is clear it is taking money from oldies while giving lots more to strikers, the uproar is scarcely less huge. The politics, though empathically not the economics, suggest that the Chancellor will feel she has to destroy capital formation to placate her furious party.
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