I won’t budge on winter fuel payments, Rachel Reeves vows as she admits there is a ‘harder’ road ahead
23 September 2024, 13:12 | Updated: 23 September 2024, 13:13
Chancellor Rachel Reeves has said that the economic ‘road ahead is steeper than harder than expected’ as vowed to stick by the winter fuel payments cut during her party conference speech.
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She braced millions of people for “a budget to fix the foundations. A budget to deliver the change we promised. A budget to rebuild Britain.”
“We said we would not increase taxes on working people, which is why we will not increase the basic higher or additional rates of income tax, national insurance or VAT,” she said.
However a grab on capital gains tax and inheritance taxes are both expected, as is a raid on pensions relief.
On the decision to means-test winter fuel payments, she said she would “not duck” difficult decisions.
“I made the decision to means-test the winter fuel payment so it is only targeted at those the most in need,” she said.
“I know not everyone in this hall or the country will agree with every decision I make but I will not duck those decisions. Not for political expediency. Not for personal advantage.
“Faced with that £22 billion black hole and that triple lock … I judged it the right decision in the circumstances that we inherited. I did not take those decisions lightly.”
Under her plans, 10m pensioners will lose their winter fuel payments.
Read more: Anti-Israel heckler disrupts Rachel Reeves's speech at Labour conference
During her conference speech, Ms Reeves repeatedly blamed Tory "recklessness" for the tough decisions coming in the October 30 Budget.
Her speech was also briefly disrupted by an anti-Israel protester who was bundled to the ground and drowned out by boos from the crowd.
Sir Keir Starmer has promised to protect public services from swingeing cuts, as he made a bid to move on from rows over donations and strife at No 10, after arriving at the Labour Party conference.
The Prime Minister said his Government was not "going down the road of austerity", like that pursued by David Cameron's administration.
It may signal that the Treasury has found new ways to free up funds, after the halt on spending to address a £22bn black hole in the public finances announced not long after Labour came to power.
In a series of wide-ranging interviews with Labour-friendly newspapers ahead of the party's Liverpool gathering, Sir Keir also acknowledged the damaging impact of the row over clothing donations he had received, and of internal fighting within his Downing Street operation.
Sir Keir said austerity-era cuts did a "huge amount of damage to our public services", drawing on his experience as director of public prosecutions.
"We are still feeling the damage even now. So we are not going down the road of austerity," he said.
He told a Saturday night reception in Liverpool that he wanted his Government to be compared with Clement Attlee's transformational post-war administration.
The 1945 Labour government set up the NHS and helped rebuild the UK after the devastation of the Second World War.
But in the present, Sir Keir faces lingering anger over the decision to strip winter fuel payments from about 10 million pensioners, with union calls at conference to reverse the move.
Labour's largest union backer, Unite the Union, is pushing for changes at the conference, including reversing the cuts to the winter fuel allowance.
The union is also calling on Chancellor Rachel Reeves to introduce a wealth tax on the top 1%, an "excess profits" tax, change capital gains tax rates to match income tax, and make investment income liable to national insurance.
With the conference taking place against a backdrop of rising tensions in the Middle East, hundreds of pro-Palestinian protesters gathered on Liverpool's waterfront to coincide with Sir Keir's arrival at the event on Saturday.
There is also consternation among the Labour movement about his and his wife Lady Victoria Starmer's acceptance of gifts, including clothing, from prominent Labour donor and peer Lord Alli.
Sir Keir, Chancellor Rachel Reeves, and Deputy Prime Minister Angela Rayner have said they will not accept such donations in the future.
The announcement came after donations "in kind" listed in the publicly available registers of interest for both Ms Reeves and Ms Rayner were also disclosed to be for clothing.
The row has drawn criticism from Labour's political opponents, who have contrasted the lavish gifts with the Government's decision to limit the winter fuel payment for pensioners.
Sir Keir dismissed suggestions the row would hurt his popularity in the long-run however, and said voters would judge him on his record of delivery.
Sir Keir is also grappling with an internal row within his No 10 operation, after reports of tensions between chief of staff Sue Gray and senior officials.
The leaked disclosure that Ms Gray is paid £170,000, some £3,000 more than the Prime Minister, has added to the rumours of behind-the-scenes difficulties in No 10.
He acknowledged the destabilising nature of the row, telling the Observer: "It is my job to do something about that and I accept that responsibility. And that just damages everybody."
