Since becoming Chancellor of the Exchequer, Rachel Reeves has made avoidable political mistakes. There have been economic mistakes as well, but Reeves would say her options were constrained from the beginning by the government’s dire inheritance and its desire to settle long-standing pay disputes with public-sector unions. The political mistakes were her own, however, such as removing the £300 winter fuel allowance from most pensioners. She publicly defends that decision but now understands that the politics of her role are as important as the economics: she must make her own political decisions rather than allowing unelected Treasury officials to make them for her.
The proposal to remove the winter fuel allowance was a perennial favourite of the Treasury – even George Osborne, the self-styled austerity chancellor of the coalition years, rejected it. Its removal continues to cause serious problems for Labour MPs, especially those in the volatile Red Wall heartlands where Nigel Farage’s anti-system Reform UK is strong, and in Scotland, where the SNP is increasingly confident of retaining power at the Holyrood elections next year.
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