Reeves cannot afford more episodes like the winter fuel U-turn

This afternoon Rachel Reeves finally completed the longest U-turn in British politics. Ahead of her spending review on Wednesday, the Chancellor confirmed she intends to reverse most of the cuts to winter fuel that she announced last summer. In July, she removed the benefit from ten million pensioners; today she admitted she will restore it to nine million of them.

All those with an income of less that £35,000 will have their payments of between £200 to £300 restored this winter. Roughly two million pensioners with an income above £35,000 will lose it via PAYE or self-assessment. Cutting winter fuel was forecast to save £1.25 billion; today’s U-turn whittles that sum saved down to around £450 million. Reeves will have to make up the shortfall in her next Budget this Autumn – raising fears that she will hike taxes yet again.

Strikingly, the Chancellor is still defending her initial decision to cut the state benefit. ‘Targeting winter fuel payments was a tough decision, but the right decision,’ she said this afternoon, ‘because of the inheritance we had been left by the previous government.’ That is despite Britain’s fiscal circumstances now being significantly worse than when Labour entered office last summer.

The U-turn on winter fuel has been mishandled every step of the way. It was a mistake to announce its scrapping as a stand-alone measure last summer. It was a mistake to persist with it for so long, despite its evident unpopularity. It was a mistake to allow speculation about a U-turn to continue for weeks after the local elections. And it was a mistake for the Chancellor to claim implausibly this afternoon that, somehow, economic circumstance, not political necessity, forced the change in policy.

Gordon Brown – the Labour leader whom Reeves idolises most – was the man responsible for introducing winter fuel as Chancellor in 1997. He cannily saw the political difficulty in reversing such a benefit which Reeves, clearly, did not. ‘Too. Many. Mistakes. Too. Many. Mistakes’, Brown would growl in No. 10, thumping his desk, whenever the world seemed to be closing in.

It is a mantra that Reeves would do well to remember. Given the fiscal and political constraints facing this government, she cannot afford more expensive episodes like the one she has just concluded. Otherwise, ‘Too. Many. Mistakes’ risks being the epithet on her political tomb.