Rachel Reeves entered office vowing that there would be no return to austerity. Her first Budget imposed the largest tax rises since 1993 in order to justify that boast. Spending was increased by £70bn a year, taking traditionally free-market Britain closer to its social democratic neighbours. Reeves’ reward? To be defined by a cut.  For almost a year the Chancellor’s decision to withdraw winter fuel payments from most pensioners haunted her. Labour MPs took to calling it the government’s “original sin”; for voters it was proof that an administration that promised “change” merely represented more of the same. William Gladstone, it is said, occupied the Treasury from 1860 to 1930. The charge Reeves has faced in recent months – as her ...

Winston Churchill believed that “the Americans can always be counted on to do the right thing, once all other possibilities have been exhausted”. The same, one minister tells me, is true of Rachel Reeves and winter fuel payments.  Two days before her first Spending Review (which I preview here), Reeves has announced that winter fuel payments will be restored to three-quarters of pensioners (or all those earning below £35,000). The Chancellor wants to use the event to tell a story of pro-growth investment and dispel accusations of austerity – hence this advance U-turn.  As I reported last August, plenty inside government always feared that the original £11,500 earnings threshold – above which the £200-£300 benefit was withdrawn – was too brutal. So ...

On Wednesday, Rachel Reeves will publish the Government’s Spending Review, outlining the financial settlement for the coming three years. At this final stage in the process, she might consider lessons from an unlikely source: the US President. In recent months, Donald Trump has taken to trashing areas of deep US strength that were taken for granted so completely that they were invisible to most. Trump has done Reeves a favour, by paving paradise and putting up a parking lot. His actions are a reminder of the importance of investing in the unseen infrastructures that enable prosperity. The British Academy has just published a series of papers exploring what might pull the UK out of its long period of low productivity. The ...

Is James Cleverly making another bid for the Conservative leadership? That’s certainly how his speech at the Conservative Environment Network’s Sam Barker Memorial Lecture on Wednesday night, in which he talked about “rejecting both the Luddite left and the Luddite right”, has been interpreted by Tory watchers. “James Cleverly takes on Kemi Badenoch over decision to ditch net zero targets”, read the Guardian headline. The Mail went with “Kemi Badenoch faces Net Zero revolt as Tory big beast James Cleverly warns her to ignore climate change ‘luddites’”. The Telegraph, meanwhile, wrote it up as “Former home secretary directly challenges Kemi Badenoch on net zero”. Cleverly himself has pushed back hard against the suggestion that his speech was in any way a rebuke of the current Tory ...

Labour’s win in the Hamilton, Larkhall and Stonehouse by-election caught almost everyone out. The Holyrood seat was one that the party needed to take from the SNP if it is to stand a chance of winning next year’s devolved election. But few expected Labour to do so. It was running third favourite, behind the SNP and Reform. The Nats were confident they’d retain the seat, while it seemed possible that Reform could just about pull off a coup. In the end, it is Keir Starmer and Anas Sarwar who have emerged triumphant. Given the troubles of the UK government and the poor polling of Scottish Labour, this will provide both with a much-needed psychological boost. “We have proven the pollsters, the political ...

Rachel Reeves is not where she wanted to be. When the Chancellor announced winter fuel payment cuts almost a year ago they were designed to advertise her strength. In order to restore economic stability, ran the narrative, Reeves would venture where previous governments feared to tread (David Cameron repeatedly rejected Tory demands to means-test pensioner benefits). Wonks applauded her taboo-busting. Paul Johnson, the director of the Institute for Fiscal Studies, whose book, Follow the Money, Reeves is fond of, praised the move as “sensible”. The aim, No 11 said at the time, was to display discipline not just to the bond market but to voters (who often doubt Labour’s economic competence). Yet now, as Reeves’ slow-motion U-turn continues, she is advertising her weakness. A ...

The government’s disability benefit cuts would force people out of work or to reduce their working hours, according to new research by the Money and Mental Health Policy Institute – the charity led by Martin Lewis, the consumer champion. Labour’s plans to tighten assessments for the personal independence payment (PIP) will affect around 800,000 claimants. The benefit, designed to help people with disabilities and chronic mental and physical conditions live an independent life, is currently paid to more than 3.6 million people. Ministers insist their welfare reforms will bring more people “back into work”. But nearly two thirds of working people receiving PIP surveyed by the charity said they would need to reduce or give up work without the payments. Reasons cited ...

Keir Starmer’s Downing Street was dysfunctional from its earliest days. Labour, senior figures often say, had a plan to win but not a plan to govern. Blame for this was attributed to Sue Gray, who resigned as Starmer’s chief of staff after just four months in office and whose tenure still “casts a long shadow” in the words of one government source.  No 10 has strived ever since to recover from this false start. As well as the appointment of Morgan McSweeney as Gray’s replacement, two Blair-era figures joined last November: Jonathan Powell as national security adviser and Liz Lloyd as director of policy delivery and innovation. In his memoir A Journey, Tony Blair writes of the latter that she brought ...