It is always a sign that politicians are rattled when they start coming up with ludicrous explanations for ill thought-through decisions that stir up serious opposition. And you don’t get much more ludicrous than Lucy Powell’s claim that the government was forced into emergency spending cuts because of the risk of a run on the pound. Fear of a backlash from the City was – according to the leader of the Commons – the reason the decision to axe winter fuel payments for millions of pensioners had to go ahead.
Let’s be clear. Rachel Reeves was under zero pressure from the City to cut investment spending or means-test the £200 or £300 tax-free sum paid to elderly people each winter. There was not the slightest murmur from currency traders before the chancellor’s announcement that she had found a £22bn hole in the public finances. Nor was there ever likely to be.
