Connect with us

Published

on

Liberal Democrat leader Sir Ed Davey calls it “the first big mistake this government has made”.

The decision by the new Labour Chancellor Rachel Reeves to axe the £300 Winter Fuel Payment for 10 million pensioners forever is probably the biggest domestic headache for Prime Minister Sir Keir Starmer as MPs return to Westminster from their summer holidays this week.

It may soon lead to the first big climbdown by the incoming government.

Follow latest politics updates

In the first few weeks after winning July’s general election, Labour has used its honeymoon to blame the last Conservative government for the poor state of the nation and the dim prospects for recovery.

Ministers exposed two “black holes” – the first is the gap between planned annual expenditure and expected income and borrowing. A subject widely discussed by everyone except the leading politicians during the recent election campaign.

More dramatically, on 29 July Reeves accused the Conservatives of hiding a further £22bn shortfall in the current year’s finances.

More on Labour

Her response was to make “incredibly tough choices”, including limiting what had been a flat payment to all pensioners to only those on pensioner credit or other benefits.

This equates to just over a million of the total of more than 11 million who have been receiving the payments – those with incomes of £12,600 a year or less, a “very, very low” figure in the words of Martin Lewis, the personal finance expert.

At the same time as the cutbacks for the elderly, the chancellor announced she had found the cash to fully fund the above-inflation pay awards for the public sector and to buy off strikes by rail and doctors’ unions.

These payouts account for around half of the short-term black hole Reeves claimed she had been left by the Tories, according to the Institute for Fiscal Studies.

Reeves ‘caved meekly’

Impetuosity and inexperience lie behind the troublesome winter fuel announcement – for which no properly argued explanation, beyond regret, was offered.

Reeves appeared to have caved meekly to the Treasury’s traditional bean-counting smallness, which often looks better on the spreadsheet than in the real world.

For a start, if implemented as the government says it intends, it would not even save the relatively paltry £1.5bn intended.

Currently, 866,000 poor people, some 30% of those eligible, do not take up pension credit. The government says it plans a drive to encourage applications.

Were they all to be successful the Exchequer would be out of pocket, spending more not saving.

Please use Chrome browser for a more accessible video player

Energy cap: ‘It depresses me’

Chancellor’s easy pickings

A philosophical undertow in Starmer’s Labour also helps explain why pensioners were the first call for his chancellor’s easy pickings. Starmer does not declare “we are all in it together”; his concerns are more focused on “working people“.

Most pensioners, especially the oldest, do not work. Starmer says he prefers to spend the money on making the trains run and shorter NHS waiting lists – mainly to benefit the workforce who he is relying on to deliver growth.

There is also a perception that it is time to level out (“up” is not the right word in this context) because pensioners have done better than younger cohorts in recent decades.

The last Labour government made ending pensioner poverty a priority and successive governments have kept the triple lock in place for state pension increases.

As a result, the former Conservative cabinet minister David Willetts, who now heads the Resolution Foundation, reports that pensioner incomes have doubled while incomes for the rest have only gone up by half in the same time period.

The difficulty for Labour is that comparisons between the generations are only relative. And relative pensioner poverty has actually gone up from 13% in 2011-2012 to 16% in 2022-23.

Reeves has created a painful cliff edge by limiting winter fuel payments to those on an income of £230 a week.

Pensioners not where Labour gets votes

There are millions of pensioners just above that red line who are also struggling to get by. This winter that will be even harder because the energy regulator Ofgem has approved a 10% rise in the energy price cap, on average that means a £500 annual increase in bills.

Pensioners are not where Labour gets its votes. The party’s constituency is “working people”.

The Conservatives focused heavily and unsuccessfully on older voters in this year’s general election. As it turned out, a voter had to be aged 62 or over to be more likely to vote Conservative than Labour.

Please use Chrome browser for a more accessible video player

Labour MP wants winter payment rethink

Nobody is Malthusian enough to say that it would be a good thing if pensioners die of cold, but the fact remains that the growing percentage of the population which is elderly is a major economic problem in developed countries, including Britain.

Until now, winter fuel payments (worth £300 to the over-80s and £200 to younger pensioners) were paid out automatically to all pensioners regardless of wealth.

Some poorer pensioners have also been eligible for a cost of living payment worth up to £300 and a one-off warm home discount of £150.

These payments should not be confused with the discretionary means-tested cold weather payments made by councils in the event of a sustained period of freezing temperatures.

Read more:
243-question form to get winter payment

Are you still eligible for the payment?
Analysis: Reeves under attack on two fronts

Follow Sky News on WhatsApp
Follow Sky News on WhatsApp

Keep up with all the latest news from the UK and around the world by following Sky News

Tap here

Badly designed scheme

Starmer complained at his news conference last week that winter fuel payments are “not particularly well designed”. By which he meant that wealthier pensioners who do not need the money were getting it.

That is true, although it could be regarded as a tax allowance. Reeves has rushed into introducing another badly designed scheme which will have millions of victims.

Her speech had relatively little impact when she delivered it at the start of the summer holidays on 29 July. Now the news has sunk in, 450,000 people have signed an Age Concern petition against the plan.

Conservative MPs have tabled an early day motion against it, which could force the government to hold a vote. Meanwhile, mainstream loyalist MPs are expressing their concern in private.

Please use Chrome browser for a more accessible video player

Cuts to pensioners’ winter fuel payments

Slump in government’s popularity

The generations are not taking sides against each other. Young people face much greater costs for higher education and are struggling to buy their own homes.

But, on average, there are also significant transfers of money down the generations as parents and grandparents do what they can to help out.

The government’s popularity has slumped in opinion polls. Only 23% approved of the government, compared to 51% who disapproved in YouGov’s survey last week. The fuel payment cut is opposed by all age groups.

Conservative politician Gavin Barwell gloated: “This is what happens if you aren’t straight with the people before polling day – and yes, the Conservatives weren’t either – and say you have to cut fuel payments for all but the poorest pensioners because there’s no money while offering public sector workers more generous pay deals.”

As her critics are pointing out, Reeves could have avoided controversy, and made the new system fairer, if she had simply said that from now on the payments would be taxable, as pensions already are. But she chose not to.

👉 Tap here to follow the Sky News Daily podcast 👈

Instead, she made a similar mistake to former Labour chancellor Gordon Brown, who, by the way, introduced the Winter Fuel Payment. Brown abolished the 10p rate in his last budget and failed to take account of the income cliff edges he was creating for lower earners.

His admitted “mistake” caused an outcry. It dogged Brown’s subsequent term as prime minister, while his chancellor Alistair Darling tried repeatedly to make up for it. And that was in a budget when Brown cut the basic rate of income tax. Reeves has no such plans.

The chancellor has a chance to make corrections. She could try and raise the cut-off threshold now.

It would be wiser to take a breath and to say now that she plans to give her plans further consideration in her budget, which is already scheduled on 30 October.

That would allow her to think again about her hasty and callous measure in the proper, broader, context of the economic situation in which citizens of all ages find themselves.

Continue Reading

Politics

Labour WhatsApp messages on Supreme Court ruling point to future tensions on trans issues

Published

on

By

Labour WhatsApp messages on Supreme Court ruling point to future tensions on trans issues

It’s no great surprise that members of a Labour MPs’ LGBT+ WhatsApp group would be raising concerns about the impact of this week’s Supreme Court ruling on the trans community.

But the critical contributions reportedly made by some of the group’s higher-profile ministerial members highlight the underlying divisions with the Labour Party over the issue – and point to future tensions once the practical implications of the judgement become clear.

Messages leaked to the Mail on Sunday allegedly include the Home Office minister Dame Angela Eagle writing “the ruling is not as catastrophic at it seems but the EHRC [Equality and Human Rights Commission] guidance might be & there are already signs that some public bodies are overreacting”.

Culture minister Sir Chris Bryant reportedly replied he “agreed” with another MP’s opinion that the EHRC chair Baroness Falkner was “pretty appalling” when she said the ruling would mean trans women could not use single-sex female facilities or compete in women’s sports.

Please use Chrome browser for a more accessible video player

Gender ruling – How it happened

Government sources argue these messages are hardly evidence of any kind of plot or mass revolt against the Supreme Court’s ruling.

But they still raise uncomfortable questions for a party that has been on a tortuous journey over the issue.

Under Jeremy Corbyn, Labour was committed to introducing self-identification – enabling people to change their legal sex without a medical diagnosis – a position dropped in 2023.

Back in 2021, Sir Keir Stamer said the then Labour MP Rosie Duffield was “not right” to say “only women have a cervix”. But three years later he acknowledged that “biologically, she of course is right”.

Duffield, who now sits as an independent, is asking for an apology – but that doesn’t seem to be forthcoming from a government keen to minimise its own role in changing social attitudes to the issue.

The Conservative position on this has also chopped and changed – with Theresa May‘s support for gender self-ID ditched under Boris Johnson.

Read more from Sky News:
School leaders issue warning as free breakfast clubs set to open

Four things to avoid if you’re doing the London Marathon

As the Conservatives’ equalities minister, Kemi Badenoch led the UK government’s fight against Scotland’s efforts to make it easier to change gender – and she’s determined to punch Labour’s bruise on the issue.

This weekend, she’s written to the cabinet secretary calling for an investigation into a possible breach of the ministerial or civil service code over a statement made by the Education Secretary Bridget Phillipson in response to the ruling, which said “we have always supported the protection of single-sex spaces based on biological sex”.

The Tories claim this is false, because last summer Ms Phillipson herself gave an interview in which she suggested that trans women with penises could use female toilets.

Ms Phillipson has been approached for a response.

Her comments, however, are entirely in keeping with the government’s official statement on the judgement, which claims they have “always supported the protection of single-sex spaces based on biological sex” and welcomed the ruling as giving “clarity and confidence for women and service providers”.

The government statement added: “Single-sex spaces are protected in law and will always be protected by this government.”

Continue Reading

Politics

‘Crypto is not communism’ — Exec slams BIS’ take on crypto

Published

on

By

‘Crypto is not communism’ — Exec slams BIS’ take on crypto

‘Crypto is not communism’ — Exec slams BIS’ take on crypto

The Bank for International Settlements’ (BIS) push to isolate crypto markets and its controversial recommendations on DeFi and stablecoins is “dangerous” for the entire financial system, warns the head of a blockchain investment firm.

“Many of their recommendations and conclusions — perhaps due to a mix of fear, arrogance, or ignorance — are completely uninformed and, frankly, dangerous,” CoinFund president Christopher Perkins said in an April 19 X post, referring to the BIS’ April 15 report titled “Cryptocurrencies and Decentralized Finance: Functions and Financial Stability Implications.” 

BIS recommendations exposes TradFi to risks of “unimaginable scale”

“Crypto is not communism,” Perkins said, pushing back against the BIS’ call for a “containment” approach to isolate crypto from traditional finance and the broader economy.

“It’s the new internet that provides anyone with a connection access to financial services,” Perkins said. “You cannot control it anymore than you control the internet,” he added.

Perkins warned that a containment approach to crypto would expose the traditional financial system to massive liquidity risks “of unimaginable scale,” especially when the crypto market operates in real-time, 24/7, while traditional financial markets shuts down after trading hours.

“If implemented they will cause–not mitigate–the systemic risk they seek to prevent.”

The report warned that the number of investors and amount of capital in crypto and DeFi have “reached a critical mass,” with investor protection becoming a “significant concern for regulators.”

Cryptocurrencies
Source: Michael Egorov

Perkins pushed back against the BIS’ claim that DeFi presents significant challenges, arguing instead that it represents a “significant improvement” over the “opacity” and imbalances of the traditional financial system.

Related: Crypto industry is not experiencing regulatory capture — Attorney

Responding to the BIS’s concern about the anonymity of DeFi developers, Perkins questioned its relevance:

“Sorry, but when was the last time a TradFi company published a list of its developers? Sure, public companies provide a degree of disclosures and transparency, but they seem to be dying off in favor of private markets.”

Perkins also critiqued the BIS’s concern around stablecoins that it could lead to “macroeconomic instability in countries like Venezuela and Zimbabwe.”

“If there is demand for USD stablecoins and it helps improve the condition of anyone in the developing world, perhaps that is a good thing,” Perkins said.

Cryptocurrencies
Source: Christopher Perkins

Perkins wasn’t alone in criticizing the controversial report. Lightspark co-founder Christian Catalini also weighed in, posting a series of critiques on X that same day. Catalini summed up the report with the analogy:

“Think: writing parking regulations for a fleet of self‑driving drones — earnest work, two technological leaps behind.”

Magazine: Altcoin season to hit in Q2? Mantra’s plan to win trust: Hodler’s Digest, April 13 – 19

Continue Reading

Politics

The British economy has lost out – and sucking up to Trump will only get Starmer so far

Published

on

By

The British economy has lost out - and sucking up to Trump will only get Starmer so far

Unwary travellers returning from the EU risk having their sandwiches and local delicacies, such as cheese, confiscated as they enter the UK.

The luggage in which they are carrying their goodies may also be seized and destroyed – and if Border Force catch them trying to smuggle meat or dairy products without a declaration, they could face criminal charges.

The new jeopardy has come about because last weekend, the government quietly “extended” its “ban on personal meat imports to protect farmers from foot and mouth”.

This may or may not be bureaucratic over-reaction.

It’s certainly just another of the barriers EU and UK authorities are busily throwing up between each other and their citizens – at a time when political leaders keep saying the two sides should be drawing together in the face of Donald Trump’s attacks on European trade and security.

Starmer and Macron meeting at Chequers last month. Pic: Reuters
Image:
Keir Starmer’s been embarking on a reset with European leaders. Pic: Reuters

The ban on bringing back “cattle, sheep, goat, and pig meat, as well as dairy products, from EU countries into Great Britain for personal use” is meant “to protect the health of British livestock, the security of farmers, and the UK’s food security.”

There are bitter memories of previous outbreaks of foot and mouth disease in this country, in 1967 and 2001.

In 2001, there were more than 2,000 confirmed cases of infection resulting in six million sheep and cattle being destroyed. Footpaths were closed across the nation and the general election had to be delayed.

In the EU this year, there have been five cases confirmed in Slovakia and four in Hungary. There was a single outbreak in Germany in January, though Defra, the UK agriculture department, says that’s “no longer significant”.

The UK imposed bans on personal meat and dairy imports from those countries, and Austria, earlier this year.

Authorities carry disinfectant liquid near a farm during an outbreak of foot-and-mouth disease in Dunakiliti, Hungary. Pic: Reuters
Image:
Authorities carry disinfectant near a farm in Dunakiliti, Hungary. Pic: Reuters

Better safe than sorry?

None of the cases of infection are in the three most popular countries for UK visitors – Spain, France, and Italy – now joining the ban. Places from which travellers are most likely to bring back a bit of cheese, salami, or chorizo.

Could the government be putting on a show to farmers that it’s on their side at the price of the public’s inconvenience, when its own measures on inheritance tax and failure to match lost EU subsidies are really doing the farming community harm?

Many will say it’s better to be safe than sorry, but the question remains whether the ban is proportionate or even well targeted on likely sources of infection.

Read more: The products you can’t bring into Britain from the EU

Gourmet artisan chorizo sausages on display on a market stall. File pic: iStock
Image:
No more gourmet chorizo brought back from Spain for you. File pic: iStock

A ‘Brexit benefit’? Don’t be fooled

The EU has already introduced emergency measures to contain the disease where it has been found. Several thousand cattle in Hungary and Slovenia have been vaccinated or destroyed.

The UK’s ability to impose the ban is not “a benefit of Brexit”. Member nations including the UK were perfectly able to ban the movement of animals and animal products during the “mad cow disease” outbreak in the 1990s, much to the annoyance of the British government of the day.

Since leaving the EU, England, Scotland and Wales are no longer under EU veterinary regulation.

Northern Ireland still is because of its open border with the Republic. The latest ban does not cover people coming into Northern Ireland, Jersey, Guernsey, or the Isle of Man.

Rather than introducing further red tape of its own, the British government is supposed to be seeking closer “alignment” with the EU on animal and vegetable trade – SPS or “sanitary and phytosanitary” measures, in the jargon.

Various types of cheese. Pic: iStock
Image:
A ban on cheese? That’s anything but cracking. Pic: iStock

UK can’t shake ties to EU

The reasons for this are obvious and potentially make or break for food producers in this country.

The EU is the recipient of 67% of UK agri-food exports, even though this has declined by more than 5% since Brexit.

The introduction of full, cumbersome, SPS checks has been delayed five times but are due to come in this October. The government estimates the cost to the industry will be £330m, food producers say it will be more like £2bn.

With Brexit, the UK became a “third country” to the EU, just like the US or China or any other nation. The UK’s ties to the European bloc, however, are much greater.

Half of the UK’s imports come from the EU and 41% of its exports go there. The US is the UK’s single largest national trading partner, but still only accounts for around 17% of trade, in or out.

The difference in the statistics for travellers are even starker – 77% of trips abroad from the UK, for business, leisure or personal reasons, are to EU countries. That is 66.7 million visits a year, compared to 4.5 million or 5% to the US.

And that was in 2023, before Donald Trump and JD Vance’s hostile words and actions put foreign visitors off.

Please use Chrome browser for a more accessible video player

Trump: ‘Europe is free-loading’

More bureaucratic botheration

Meanwhile, the UK and the EU are making travel between them more bothersome for their citizens and businesses.

This October, the EU’s much-delayed EES or Entry Exit System is due to come into force. Every foreigner will be required to provide biometric information – including fingerprints and scans – every time they enter or leave the Schengen area.

From October next year, visitors from countries including the UK will have to be authorised in advance by ETIAS, the European Travel and Authorisation System. Applications will cost seven euros and will be valid for three years.

Since the beginning of this month, European visitors to the UK have been subject to similar reciprocal measures. They must apply for an ETA, an Electronic Travel Authorisation. This lasts for two years or until a passport expires and costs £16.

The days of freedom of movement for people, goods, and services between the UK and its neighbours are long gone.

The British economy has lost out and British citizens and businesses suffer from greater bureaucratic botheration.

Nor has immigration into the UK gone down since leaving the EU. The numbers have actually gone up, with people from Commonwealth countries, including India, Pakistan and Nigeria, more than compensating for EU citizens who used to come and go.

Focaccia sandwiches with prosciutto. Pic: iStock
Image:
Editor’s note: Hands off my focaccia sandwiches with prosciutto! Pic: iStock

Will European reset pay off?

The government is talking loudly about the possible benefits of a trade “deal” with Trump’s America.

Meanwhile, minister Nick Thomas Symonds and the civil servant Mike Ellam are engaged in low-profile negotiations with Europe – which could be of far greater economic and social significance.

The public will have to wait to see what progress is being made at least until the first-ever EU-UK summit, due to take place on 19 May this year.

Hard-pressed British food producers and travellers – not to mention young people shut out of educational opportunities in Europe – can only hope that Sir Keir Starmer considers their interests as positively as he does sucking up to the Trump administration.

Continue Reading

Trending