The disastrous handling of the winter fuel payment cut is a tragedy for Britain

Labour’s lines are now so muddled and incoherent that no one can follow them

It was the only way to stop the markets from crashing. There was no other way to fix the catastrophic black hole the Conservatives left in the Government’s books. And pensioners won’t lose out anyway – even the poorest. 
A variety of hapless Labour ministers have been floundering around, making increasingly desperate arguments for scrapping the universal winter fuel payment. On Tuesday, the Government managed to convince Labour MPs to hold their noses for now and not rebel en masse. But nobody can possibly think that ministers have persuaded the public. 
And it’s a wasted opportunity. There is a perfectly respectable case to be made for getting rid of the payment, on the grounds that it targets the wrong people, and it is part of a bloated benefits system that is dragging the entire economy down. 
Even better, making that argument could have been the start of a series of genuinely bold reforms by the new Government. Instead, Sir Keir Starmer, Rachel Reeves and other ministers have made a complete hash of it – and the price will be a high one.
The decision to scrap the winter fuel allowance of £300 for every pensioner still looks like it may turn into a crisis for the Starmer administration, despite Tuesday’s half-hearted Commons victory. 
Rushed through with little apparent planning, it has proved hugely unpopular, both with the retirees who will lose the help they had expected over the winter, and with Labour backbenchers who hardly expected after 14 years of campaigning against “austerity” to be whipped into a measure so harsh even George Osborne didn’t dare try it. 
We have heard a bewildering succession of defences of the decision. They had to fix the “black hole”, despite finding billions for pay rises to train drivers, and to “invest” in GB Energy. The markets would crash if they didn’t take “tough choices”, even though the pound has been rising and there is no sign of pressure from the bond vigilantes. 
And, strangest of all, that retirees will actually get more money due to an increasing state pension, even though that seems to make the whole exercise pointless. It is a garbled mess. The plot of Ulysses seems straightforward by comparison.
 
The tragedy is that there was a compelling and coherent argument to be made in favour of the policy. To start with, over the last 14 years, the tax and benefits system has become too skewed towards pensioners, and against younger generations trying to buy their first home and start a family. 
When the allowance was launched by Gordon Brown way back in 1997, there was a genuine gap between the incomes of retirees and working age people, and pensioner poverty was a real issue. But since 2000, the proportion of pensioners in poverty has fallen, while the medium income of retirees has risen more strongly compared to that of working age people. 
Next, ending the universality of the payment could have been pitched as just the start of a huge reform of a dysfunctional welfare and benefits system. The UK is currently spending £340bn a year on welfare payments, raising taxes to record levels only to hand the money back to many of the same people who paid for it all in the first place. 
Huge amounts of money are wasted along the way, and marginal tax rates on young families of 60pc or more discourage people from working. It would be far simpler to let people keep more of their own money, to tax them less, and offer fewer benefits in return. 
Finally, the Government could have argued that we have far too many universal benefits and services that cost the taxpayer billions, and drag down the entire economy. We could start reforming pensions more widely, so that people save for retirement themselves instead of relying on the state. 
We could offer tax relief on private education so that people didn’t necessarily have to rely on whatever their local authority offered them. Heck, we could even have a social insurance system of healthcare, as they do in most of the rest of Europe, instead of a state-run monster funded entirely out of general taxation. 
The core message would have been this. The winter fuel allowance is the low hanging fruit, so we are picking that first. But it is just the beginning of a far wider reform of the system, designed to make sure work pays, that no one is left in dire poverty, that the tax burden gradually comes down, and that the public finances are kept in a sustainable shape. 
Putting all those points together, and backed by a huge majority, the Government could have actually won that argument, for a simple reason. There is a lot of truth in it. 
If it had done so, it would have had a platform for an administration that was both genuinely reforming, and stayed true to the spirit of a Left-of-centre party committed to social justice. 
Instead, it has made a complete mess of it, advancing arguments that are so muddled and incoherent that no one can follow them. And it is likely to be so scarred by an epic battle with its own supporters over a trivial sum of money that it won’t do anything else to reform the welfare system – and that really will be a tragedy for the whole country.