Means-testing winter fuel payments show Starmer is willing to peek into the Too Difficult Box, but he must resist to urge to slam it shut again, writes James Price
Nearly ten years ago, former Labour home secretary Charles Clarke edited a book called The Too Difficult Box. This metaphorical container harboured all of the big structural, thorny problems that were rendered impossible to fix by the modern political and media climate.
There have been stabs at serious reform since then: Theresa May’s valiant efforts to fix social care that became the ‘dementia tax’. Dominic Cummings’ efforts to rewire the state floundered upon the rocks of Covid. And Liz Truss’s attempts to kickstart growth were also… unsuccessful. But on the whole, politicians have remained too timid to even peek inside the Too Difficult Box, and its contents have festered.
So if Starmer is, as he claims, “prepared to be unpopular” in order to be as transformational as Attlee or Thatcher, he needs to open the box.
Means-testing winter fuel payments is a brave move for which the Prime Minister deserves credit. But the Leader of the House’s assertion that not doing so could have caused “a run on the pound” suggests Labour still do not grasp the scale of the challenge. Cutting £1.4bn from the winter fuel subsidy bill will barely make a dent in the amount the state spends on pensioners. If Starmer really is willing to tackle intergenerational fairness, he should ditch the pensions triple lock. This completely unsustainable bung will see the state pension rise by £460 next year (£200 ahead of inflation) following a £900 increase last year. It will more than compensate many pensioners for the loss of the winter fuel subsidy.
But the bigger issue with the triple lock is its future costs. The Institute for Fiscal Studies estimates that it could cost anywhere between an extra £5bn and £40bn by 2050. No government can hope to effectively grip the public finances with that level of uncertainty baked in. But as the current furore over a change that still leaves pensioners better off shows, politicians go to war with the elderly at their peril.
Another item lurking in the box is truly radical NHS reform. By now, we have all had enough bad experiences with the NHS to realise that something is broken and money alone can’t fix it. Without a move to a social insurance system, like those used widely on the continent, we are sunk. But it is almost unthinkable that any government would kill this sacred cow.
Council tax is still based on property values from 1991, but updating them could see local authority revenues in the Midlands and the North fall while bills for ethnic minorities living in London would rise. Hence it’s been stowed away in the Too Difficult Box for over 30 years, alongside properly funding the armed forces, reducing immigration and any number of other thorny issues that alienate influential cohorts of voters.
So, whenever politicians tell you about their exciting plans to tinker with House of Lords reform, damage our world-leading private schools or introduce yet more red tape, ask yourself what they have left, untouched and putrefying, in the Too Difficult Box.