Quote of the day 11th September 2024

I originally had another quote planned for today, but the passage below from Robert Peston, which is the first half of a tweet about Labour's policy on Winter Fuel Payments, was too powerful not to use..

He describes Labour's explanation of why they had to do this as "laughable" and "absurd" and adds that if Treasury officials really told her that she had to do it - which his Labour contacts all say they did but his treasury contacts deny, saying it was "all her" - then that would mean that  

"Its market intelligence is rubbish and it is not the institution it once was."

So this is what Robert Peston had to say.


"Governments get into a mess when pragmatic decisions that go wrong become tests of authority and principle.  This is the tragi-comic fate of Rachel Reeves and Keir Starmer following their decision to abolish universal pensioner entitlement to the winter fuel payment.  

The chancellor announced the controversial welfare saving to prove to investors that she is serious about improving the health of the public finances. Her logic was that if she was having kittens about the £22bn current year “black hole” that she says the Tory government bequeathed her - and my goodness she doesn’t tire of telling us how anxious she is - so too would be the City of London and  investors. 

That is why she engaged in a “lite” version of Osborne’s 2010 austerity.  And her advisers and colleagues keep telling me she was only doing what Treasury officials  told her was essential to prevent a fall in the price of government debt and an associated rise in market interest rates. 

This justification however is laughable, as I normally tell them.  And I mean that literally.  Because when I talk to City investors controlling gazillions, they snort and giggle at the idea they would have turned against the self-defined iron chancellor if she hadn’t taken £1.4bn from pensioners.  

The point is that tens of billions of pounds will be needed to fix UK public services, and that £1.4bn is smaller than a rounding error.  

The idea that Reeves’s fiscal credibility - which is high in any case - would be made or broken by the pensioner raid is absurd. 

Even on the basis that it is an inefficient use of public money, because rich pensioners don’t need it, she could have waited till her October budget before deciding whether to means test the energy subsidy - and she could have announced the change in a strategic fashion along with assorted tax rises and spending re-allocations.  

If her Treasury officials told her otherwise, as her political colleagues insist they did, then its market intelligence is rubbish and it is not the institution it once was. 

As it happens, Treasury sources tell me Reeves’s defining characteristic is she is more old-school, small “c” conservative Treasury than they are, and that the pensioner squeeze was all her. 

Either way, the argument is no longer about market economics, if it ever truly was. 

It is now about competence and who is in charge."

Robert Peston.

You can read the whole post at the link below:

Robert Peston on X: "Governments get into a mess when pragmatic decisions that go wrong become tests of authority and principle. This is the tragi-comic fate of Rachel Reeves and Keir Starmer following their decision to abolish universal pensioner entitlement to the winter fuel payment. The" / X


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