Politics
Winter fuel cut savings will be far less than Reeves expected, new analysis finds | Rachel Reeves
Rachel Reeves has been warned that her cut to pensioner winter fuel payments risks saving hundreds of millions less than anticipated, in a new blow to her attempts to close the hole in Britain’s finances.
The chancellor and her Treasury team are already re-examining parts of a plan to crack down on non-dom tax status over concerns that it may not raise any money.
However, the Observer has seen analysis suggesting that the projected £1.4bn savings from her highly controversial cut to winter fuel payments are also in doubt.
Reeves has had to fight a fierce rearguard action to defend the cut, which was expected to remove payments from more than 10 million pensioners in England and Wales.
Only those receiving pension credit will be entitled to the payment this winter. The chancellor told Labour’s conference last week that she would not duck tough decisions in order to repair the public finances. The party leadership later lost a union motion calling on the government to reverse the measure.
But a new analysis suggests that a surge in claims for pension credit since the cut was announced means that any savings could be significantly lower than the Treasury had anticipated. In just eight weeks, applications have increased by 152%.
Analysis based on official government data suggests there have already been 45,000 extra claims for pension credit since the measure was revealed.
Research from Policy in Practice, a consultancy working with local authorities to alert eligible pensioners of their rights to financial support, suggests that the extra amount the Treasury had expected to spend on pension credit could be hit as soon as this week.
On current trends, the analysis suggests there could be 158,000 more claims than anticipated by the pension credit deadline in late December, costing an additional £246m.
However, because claiming pension credit also opens up a series of other benefits for those claimants, the total costs could be up to £700m more than expected.
Any fall in the savings from the winter fuel cut will make Reeves’s task even harder before the budget on 30 October, already expected to contain a series of politically unpalatable decisions deemed necessary to raise cash.
“It’s great news that more pensioners are getting the financial support they need,” said Deven Ghelani, director of Policy in Practice. “The increased income for some of the country’s poorest elderly citizens can have wider benefits, providing much needed relief during a cost of living crisis. We have seen unprecedented demand.“While this means the change is unlikely to save the Treasury as much money as it hoped, it has meant a life-changing boost in income for hundreds of thousands of pensioners living in poverty.”
A Treasury source said they did not recognise the figures. A government spokesperson said: “We want people to get the benefits they are entitled to, which is why the government is working hard to drive up pension credit uptake. We are committed to supporting pensioners – with millions set to see their state pension rise by £1,700 this parliament through our commitment to the triple lock.
“However, given the dire state of the public finances we have inherited, it’s right that we target support to those who need it most.”
The Guardian revealed last week fears that the Office for Budget Responsibility (OBR), the public spending watchdog, may conclude that its non-doms clampdown would not raise any money as a result of the super-rich leaving the UK. The plans are not expected to be completely abandoned.
Labour had hoped to raise a further £2.6bn over the course of a parliament by closing non-dom loopholes, including £1bn in the first year of the changes.
The news comes before a politically fraught budget that is set to define the early stages of the new Labour government. Treasury officials have been scrambling to find savings. Reeves has been clear that it will contain tax rises, while ruling out increases to the headline rates of income tax, national insurance and VAT.
Loopholes in inheritance tax, often exploited by the wealthy, are among the measures thought to be under consideration. Capping agricultural and business reliefs could also save £1.4bn a year. A Treasury spokesperson said they would not comment on speculation.
Reeves will seek to couch her statement as an investment budget, however. It may include a reworking of fiscal rules to allow more public borrowing, alongside measures to encourage more private financing of Britain’s ailing infrastructure.
Relaxing the way debt is measured, to take more account of the assets created for the state by public investment, has long been a popular idea with some economists. Reeves told Labour’s conference that it was “time the Treasury moved on from just counting the costs of investment in our economy to recognising the benefits too”.
Any change will lead to accusations from the Tories that she is breaking a pledge not to change fiscal rules made during the election campaign. “It is hard to avoid the suspicion that the government is attracted not by any theoretical advantages of a change in the debt rule, but by the fact that it would allow for significantly more borrowing for investment,” the Institute for Fiscal Studies said last week.
City sources said that there was an appetite to invest in British projects including new roads, schools and hospitals. But investors are pushing for a new body to oversee a fresh wave of public-private deals to avoid the acrimony, expensive legal actions and bad publicity of the private finance initiative launched by the New Labour government after 1997.
Politics
What could reparatory justice for slavery look like?
Calls for the UK to provide reparations for its historic role in the slave trade have reignited ahead of a meeting of Commonwealth countries on Friday.
While Sir Keir Starmer said reparatory justice would not be on the agenda, Commonwealth leaders have defied the prime minister and plan to move towards a “meaningful conversation” on the issue.
The UK has long faced calls to provide reparations for its role in the Atlantic slave trade which saw millions of Africans enslaved and forced to work, largely on plantations in the Caribbean and Americas.
The chancellor told the BBC the UK would not be “paying out” reparations – but might there be other forms of reparations to consider, and how likely is it that the UK would commit to them?
Reparations are measures to make amends for past actions deemed wrong or unfair.
From 1500, the British government and the monarchy were prominent participants in the centuries-long slave trade, alongside other European nations.
Britain also had a key role in ending the trade, through Parliament’s passage of a law to abolish slavery in 1833.
As part of that law, British plantation owners were paid for the loss of their slaves, to the tune of some £20m.
The UK only finished paying off the debt it incurred to cover the payments in 2015.
Reparations for the benefit of those who suffered as result of slavery can take many forms, from financial to symbolic.
The United Nations says they must be “proportional to the gravity of the violations and the harm suffered”.
Here are some of the forms they can take.
Money
This is the most commonly understood form of reparatory justice – where a state gives money to a country whose communities it enslaved.
A 2023 report co-authored by a United Nations’ judge concluded that the UK owed more than £18tn to 14 countries in reparations.
The difficulty is that most European countries would struggle to find sums as astronomic as that.
The UK government, for example, spends a total of about £1.2tn every year.
Even if governments could find the money, it would be politically unpopular to spend so much on reparations and consequently less on schools and hospitals at home.
Some campaigners answer these points by saying reparations could be paid over time.
But many demands for straight cash payments are considered unfeasible by Western governments.
So for others, the debate about financial reparations often focuses instead on the question of debt relief.
Many developing countries which suffered from slavery owe large sums to Western countries.
The cancellation or reduction of that debt could lift a massive economic burden from a developing country at little political cost for a donor country.
Apology
On the face of it, this could appear relatively straightforward.
It does not cost anything, just a public act of atonement for past sins.
Some institutions – such as the Church of England – have apologised for links to slavery.
The difficulty, though, is that apologies can sometimes act as a declaration of legal responsibility for which there could be a financial cost.
Which is why states are often reluctant to take that step.
Earlier this week, former Prime Minister Tony Blair suggested it was wrong for states to apologise for historic wrongs – despite himself saying “sorry” in 2007.
“You can go back over history, and you end up in a completely absurd position”, he told Newsweek on Wednesday.
“The most important thing we can do for countries that have been marked by colonialism is to help them now.”
Few states that played a historic role in the slave trade have taken steps towards reparations.
Education
This includes educational institutions acknowledging their own connection to slavery and how they might have profited from the slave trade.
It can also involve teaching the history of slavery, as well as creating institutions for the study of slavery.
There are also calls for supporting schools to tackle low literacy levels and other issues that some argue date back to the slave trade.
Some campaigners say school exchanges and cultural tours would also be beneficial.
The countries pushing hardest for reparatory justice from the UK are in the Caribbean – and their collective organisation, known as Caricom, has its own reparations commission with 10 demands.
Three of these deal explicitly with education and culture, saying a “restoration of historical memory” was required.
Caricom said states involved in the slave trade had a responsibility to “build educational capacity and provide scholarships”.
Health
Some argue that reparatory justice should also include health – where European countries fund clinics and hospitals.
Medical evidence shows a high rate of type 2 diabetes in the Caribbean which some suggest is associated with centuries of poor nutrition due to past enslavement.
Historian Sir Hilary Beckles told the United Nations’s UN News earlier this year: “If you look at countries with the greatest incidence of chronic diseases, black people have the highest proportions of diabetic adult patients in the world.”
He argued high rates of diabetes on his own island of Barbados “cannot be a coincidence” given it was “the first island to have an African majority and an enslaved population”.
Barbados’ government has moved toward exploring the historic impact of slavery on its population’s health.
Caricom is calling for European countries to invest in science, technology and capital toward improving hospitals, healthcare, and mental health support for the descendants of enslaved people.
Is the UK likely to provide reparations?
The UK government has never formally apologised for slavery or offered to pay reparations – and Sir Keir Starmer has not shown any intention to break the mould.
It is not Labour Party policy to introduce reparations.
Ahead of the Commonwealth summit, the prime minister explicitly said he would not provide an apology or financial compensation for slavery.
He said he wanted to focus on present issues, like the climate, rather than the past.
Chancellor Rachel Reeves doubled down on Thursday afternoon, insisting the UK would not be paying reparations.
“I’d rather roll up my sleeves and work… on the current future-facing challenges than spend a lot of time on the past”, she said.
In 2023, then Prime Minister Rishi Sunak likewise refused to provide compensation or an apology for the slave trade.
“Trying to unpick our history is not the right way forward”, he said.
Politics
Victims concerned over missing Windrush reform
Windrush campaigners have expressed concern that the home secretary has yet to announce when she will implement a key recommendation from the government’s review.
On Thursday, Yvette Cooper announced an additional £1.5m of funding to help victims apply for compensation overseen by a Windrush Commissioner – but did not hand over recommended powers to a watchdog.
Campaigners told the BBC they were happy with Labour’s approach, but thought the new system lacked “teeth”.
A Home Office source described the changes as the “first set of announcements on Windrush since the election,” adding that the focus had been on priorities highlighted by campaigners and victims.
The Windrush Review’s report, published by Wendy Williams in 2020, made 30 recommendations which were all adopted by then home secretary Priti Patel.
But in January 2023, her successor Suella Braverman dropped three of them, including establishing a migrants’ commissioner role and giving the immigration watchdog – the Independent Chief Inspector of Borders and Immigration – the power to publish its own reports.
The watchdog currently has the power to carry out investigations, but the findings can only be published by the home secretary.
Following a legal challenge by Windrush victim Trevor Donald, a judge in June condemned Braverman’s actions as “conspicuously unfair”.
On Thursday, Cooper announced a Windrush commissioner would be appointed, but did not mention the Independent Chief Inspector of Borders and Immigration.
In February the then-chief inspector David Neal was sacked for leaking reports he had written that he claimed the Home Office was sitting on.
At the time, Cooper who was still in opposition said a “series of Conservative home secretaries have sought to bury uncomfortable truths revealed by the chief inspector”.
On Thursday, Cooper said she was “changing the government’s approach” to “ensure a scandal of this kind can never happen again and dignity can be restored to those so tragically affected”.
A Home Office source said this was the “first set of announcements on Windrush since the election” and said the focus had been on priorities raised by campaigners and victims.
They indicated that a new Windrush Unit, also announced today, could look at how to implement the final recommendation.
Following today’s announcement Cooper met representatives of Windrush campaign groups.
Some of those present welcomed the tone of the home secretary and said the new government appeared to “get” what it was that campaigners were looking for.
But they said there was no mention of when the Home Office would look at more powers for the chief inspector.
One said that the chief inspector needs to “have teeth” and be able to hold ministers to account “in a proper way”.
They said today’s meeting “marked the beginning” of relations between the new Labour government.
Campaigners said that Cooper had made it clear there were still parts of the Home Office that needed to change.
Another said the meeting was “uplifting” compared to ones held with Conservative ministers, but said the chief inspector “needs to be able to publish its findings” in order to prevent a similar scandal happening again.
The Windrush scandal emerged in 2018 when Commonwealth citizens, mostly from the Caribbean, were wrongly detained, deported or threatened with deportation despite having the right to live and work in the UK.
It was discovered that the Home Office had kept no records of those granted permission to stay and had not issued the paperwork they needed to confirm their status.
Many lost homes and jobs and were denied access to healthcare and benefits.
The government apologised in 2018, when it launched the Williams’ review.
Politics
Nigel Farage calls on Tory councillors to switch to Reform UK
Nigel Farage has called on Conservative county councillors to defect to his Reform UK party.
In a letter obtained by the BBC, party leader Farage warns Tory councillors Reform’s “ground campaign capabilities will be formidable” by May’s local elections.
Speaking on X, Farage, who is also MP for Clacton in Essex, said he was writing to 1,352 Conservative county councillors as “a huge number of them genuinely agree with us and what we stand for”.
A Conservative party spokesman said: “Reform has delivered a Labour government. A vote for Reform this coming May is a vote for a Labour council.”
‘Councillors in talks with us’
In a letter sent to Essex Conservative county councillors, Farage says “our door is open should you consider standing for Reform UK”.
Farage told them since the general election “we’ve been assembling a national election winning machine at historic speed with hundreds of branches already established and over 90,000 active members ready to campaign”.
He has given Conservative councillors until 6 November to join and warns there will be a Reform candidate standing against them.
“Once somebody has been selected, we will not stand them down,” he wrote.
Farage said there were “other councillors in talks with us” after two Southend councillors defected from the Conservatives in September.
Conservative Kevin Bentley, leader of Essex County Council, said Farage’s letter “does smack of desperation”.
He said: “Some members have had a message from Reform and dismissed it.”
First Reform county councillor
A former Conservative councillor who was briefly a general election candidate has joined Reform UK.
Jaymey McIvor, who represents Ongar on Essex County Council, announced on X that he had joined Farage’s party.
The Conservatives said McIvor was expelled from the party on 9 October following a disciplinary hearing.
McIvor said he had already quit and that he had joined Reform UK as it “puts people and country first”.
He accused the Conservative Party of being “too weak to deal with its handful of toxic individuals” and they “tried to punish my ambition and vision”.
He said: “Reform has won the trust of the next generation. We are the future, we want our country back on track, rescuing it from the unpatriotic minority and put the patriotic majority back in the driver’s seat.”
McIvor was selected to stand for the Conservatives in Hemel Hempstead in the general election. But hours from the deadline for nominations to be submitted he was dropped and suspended by the party pending an investigation.
A Conservative spokesperson said: “Mr McIvor was suspended by the party and removed from the candidates list in June.
“After a disciplinary hearing, he was expelled from the Conservative Party on 9 October.”
McIvor says he will “continue to serve my residents” as a Reform UK councillor on both Essex County Council and Epping Forest District Council.
Elections for Essex County Council are due to be held in May 2025.
Earlier this year, McIvor posted on X: “For every person that joins Reform UK , they become another campaigner for a Labour government, which would achieve the polar opposite to what they want to see changed.”
A spokesperson for Reform UK said: “We believe James McIvor has been the victim of vicious Tory infighting.
“We look forward to announcing many more councillors joining us in Essex from the Tory sinking ship.”
Politics
Rachel Reeves rejects calls for UK to act
The UK is “not going to be paying out” reparations for the transatlantic slave trade, Chancellor Rachel Reeves has told the BBC.
She said she understood why Commonwealth leaders would be making such demands but it was not something the UK government would commit to.
The legacy of slavery will be raised by the leaders at their summit in Samoa, which Prime Minister Sir Keir Starmer is attending.
Ahead of Friday’s meeting, he said he wanted to discuss current challenges, especially climate change, rather than issues of the past.
“That’s where I’m going to put my focus – rather than what will end up being very, very long endless discussions about reparations,” he said.
“Of course slavery is abhorrent to everybody; the trade and the practice, there’s no question about that. But I think from my point of view… I’d rather roll up my sleeves and work… on the current future-facing challenges.”
The chancellor reiterated that message in an interview with the BBC, saying: “We’re not going to be paying out the reparations that some countries are speaking about.
“I understand why they make those demands but that’s not something that this government is doing.”
Commonwealth leaders at the Samoa summit are expected to defy the UK and debate ways of securing reparations for historical slavery. At its height, Britain was the world’s biggest slave-trading nation.
Downing Street insists the issue is not on the agenda for the summit of 56 Commonwealth countries.
But diplomatic sources said officials were negotiating an agreement to conduct further research and begin a “meaningful conversation” about an issue which could potentially leave the UK owing billions of pounds in reparations.
Frederick Mitchell, foreign minister of the Bahamas, believes the UK could change its stance and he told BBC Radio 4’s Today programme: “Once you broach the subject it may take a while for people to come around but come around they will.”
Reparatory justice for slavery can come in many forms, including financial reparations, debt relief, an official apology, educational programmes, building museums, economic support, and public health assistance.
Mr Mitchell told the Commonwealth gathering: “It’s a simple matter – it can be done, one sentence, one line.”
He said to the BBC: “The word is apologise, that’s the word.”
Asked how much reparations should amount to, he said it was not just a matter of money but of “respect, acknowledging the past was a wrong that needs to be corrected”.
He said member countries “want the conversation to start” but “there appears to be even a reluctance to have the conversation”.
Earlier, a UK government spokesperson said: “Reparations are not on the agenda for the Commonwealth Heads of Government meeting. The government’s position has not changed – we do not pay reparations.
“We are focused on using the summit at [the Commonwealth Heads of Government Meeting] to discuss the shared opportunities which we can unlock across the Commonwealth – including securing more economic growth.”
It is understood the Downing Street position – that reparatory justice is not on the agenda – while technically correct, has angered some Caribbean ministers when it was obvious the issue would be discussed at the summit.
‘Sorrow and regret’
King Charles is in Samoa for a four-day visit and is due to formally open Friday’s summit.
On a visit to Kenya last year, the King expressed the “greatest sorrow and regret” over the “wrongdoings” of the colonial era, but stopped short of issuing an apology, which would have required the agreement of ministers.
Some non-Caribbean countries are not unsympathetic towards the British position and want the summit to focus more on existing challenges – such as climate change, which is adversely affecting many Commonwealth countries, about half of whom are small island states.
But Caribbean countries seem determined to keep pressing the issue.
All three candidates hoping to be elected this weekend as the next secretary general of the Commonwealth – Shirley Botchwey of Ghana, Joshua Setipa of Lesotho and Mamadou Tangara of Gambia – have made clear they support reparatory justice.
Politics
Councillors to be allowed to work from home, says Angela Rayner
Councillors in England will be allowed to take part in debates from home using their computers, Deputy Prime Minister Angela Rayner has announced.
At the moment all local councillors are required by law to attend certain meetings in person.
The rules were suspended during the Covid pandemic, which led to Parish Council officer Jackie Weaver briefly becoming a social media sensation.
The Zoom meeting she was chairing in early 2021 erupted into fury, with Ms Weaver being told she had “no authority here” after she kicked two councillors out of the meeting.
The law change allowing council meetings to be held remotely expired on 6 May 2021.
At the time, Ms Weaver joined calls to keep virtual meetings as an option, saying scrapping them would be a “dreadful idea”.
Under the proposed new rules, councillors will also be allowed to vote on behalf of others who can’t attend debates, such as for childcare or health reasons.
Rayner told local government chiefs it would be up to them to “decide whether councillors should attend your meetings remotely or use proxy votes when they need to”.
Speaking at the Local Government Association’s (LGA) annual conference in Harrogate, the deputy prime minister said she would “[make] it possible for people from all walks of life to have a stake in local democracy, whether they have caring responsibilities or aren’t able to make it to the town hall in person because of illness or disability”.
The government has published a public consultation on the proposals.
Last year an LGA survey of around a third of English councils found nine in 10 had councillors who would make use of virtual meetings if allowed.
It comes as Whitehall civil servants were told they should be spending at least three days a week working in the office.
Councillors will no longer have to make their home addresses public, Rayner also confirmed.
The LGA had previously pushed for ending the legal obligation to publish addresses amid a rise in abuse and intimidation faced by local councillors.
Rayner, who is also the Secretary of State for Housing, Communities and Local Government, said she would allow councils to suspend local councillors for bad behaviour.
She said she had been occasionally been “made aware of cases of persistent bullying and harassment by councillors, even in some case leading to victims resignations”.
Rayner also reiterated that the government will return to giving councils multi-year funding settlements.
The Conservatives had been agreeing funding on a yearly basis, which councils said made it hard to plan their budgets.
She also said she will end local authorities having to compete against each other for government grants.
But there was no hint that any more money might be in store for cash-strapped councils in the Budget next week.
One in four councils say they are likely to need an emergency bailout from the government within the next two years without more cash now.
Politics
Keir Starmer unlikely to meet Kamala Harris before US election
Sir Keir Starmer is unlikely to meet Kamala Harris before the US presidential election in 12 days’ time, Downing Street has indicated.
The prime minister met Republican nominee Donald Trump in New York last month, and suggested he wanted to do the same with Democrat Harris.
But Sir Keir is now in Samoa for a Commonwealth leaders’ summit, as the US campaign enters its final stage before the poll on 5 November.
In recent days, there have been tensions between the Labour Party and the Trump campaign over Labour staffers who volunteered to campaign for Harris.
The Trump team have filed a complaint with the US elections watchdog, alleging the help broke US election rules on foreign interference.
The complaint, filed with the Federal Election Commission (FEC), claimed Labour had “made, and the Harris campaign has accepted, illegal foreign national contributions”.
It also took issue with Sir Keir’s chief of staff, Morgan McSweeney, and Matthew Doyle, his director of communications, attending August’s Democratic convention in Chicago.
It is understood from Labour officials that Labour met McSweeney’s costs, while Doyle was hosted by the Progressive Policy Institute, a US think tank.
But the officials said it would be wrong to suggest either man had advised or assisted the Harris campaign, adding that Labour sends a delegation to every Democratic convention.
A string of senior Labour figures have also pushed back on the accusation that activists who volunteered to help the Harris campaign violated US campaign rules.
Cabinet minister Steve Reed said Labour had not funded or organised their trips, while Sir Keir told reporters the activists travelled “in their spare time”.
“They’re doing it as volunteers. They’re staying I think with other volunteers over there,” the prime minister added.
The row over campaigning was sparked by a now-deleted social media post from Labour’s head of operations, Sofia Patel, that she had about 100 current and former party staff heading to the US before polling day.
The LinkedIn post said she had “10 spots available” for anyone willing to travel to North Carolina to campaign for Harris, adding “we will sort your housing”.
Foreign nationals are permitted to volunteer in political campaigns in the US as long as they are not compensated, according to FEC rules.
Labour sources insist no one has done anything wrong, but there is concern about whether the row could impact the so-called “special relationship” between the UK and US should Trump win on 5 November.
On Wednesday, Scotland Office minister Kirsty McNeill pulled out of a guest appearance at an online event on US election night in support of Harris.
She had been due to speak via Zoom at a Labour for Women meeting called “Come on Kamala”, to provide election analysis in a “personal capacity”, a government spokesperson said.
Conservative shadow Scottish secretary John Lamont had accused McNeill of “hosting a fully fledged rally” for Harris.
Responding to the Trump team’s complaint during his plane journey to Samoa on Tuesday, Sir Keir denied the row would damage his relationship with the Republican candidate, reminding reporters the two had dinner together at Trump Tower in New York last month.
The prime minister’s deputy spokesperson stressed the UK would always have “a deep and strong relationship with the US as our closest ally” whoever won the election.
She was not aware of any plans for government ministers to speak to Trump’s campaign team, but Sir Keir and Trump had discussed “the long-standing friendship” between the two nations during their dinner, she said.
Nigel Farage, the Reform UK leader and Trump supporter, told the BBC he believed the wording of the LinkedIn post did breach US election law, saying the rules were “very, very clear”.
Farage, who has travelled to the US to support Trump on multiple occasions, said: “The ad didn’t say you’ll be going in your own free time, didn’t say you’ll have to pay your own air fare, which at the moment by the way are very, very expensive, it said you’re going to have free accommodation.
“If you look at the wording of that advert there is little doubt that is against American election law.”
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