Winter fuel payments scrapped for millions of pensioners as Rachel Reeves reveals cuts to fill 'black hole'
29 July 2024, 17:14 | Updated: 29 July 2024, 17:30
Winter fuel payments will be scrapped for millions of pensioners as part of Chancellor Rachel Reeves' cuts to fill a "black hole" in public finances.
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Rachel Reeves said: "Today I'm making the difficult decision that those not in receipt of pension credit or certain other means-tested benefits will no longer receive the winter fuel payment from this year onwards.
"The Government will continue to provide winter fuel payments worth £200 for households receiving pension credit or £300 to households in receipt of pension credit with someone over the age of 80.
"Let me be clear, this is not a decision I wanted to make, nor is it the one that I expected to make, but these are the necessary and urgent decisions that I must make.
"It is the responsible thing to do to fix the foundations of our economy and bring back economic stability."
The announcement came as the Chancellor warned the Conservative party had left a £22 billion "black hole" in public spending.
Reeves said the Tories had hidden the extent of the hole in public finances, leaving the new Labour government with the worst inheritance since the war.
She said the Tories "gave false hope to Britain".
"The inheritance from the previous government is unforgivable.
"After the chaos of 'partygate', when they knew trust in politics was at an all-time low, they gave false hope to Britain. When people were already being hurt by their cost-of-living crisis, they promised solutions that they knew could never be paid for.
"Roads that would never be built. Public transport that would never arrive. Hospitals that would never treat a single patient.
"They spent like there was no tomorrow, because they knew that someone else would pick up the bill and then in the election - and perhaps this is the most shocking part - they campaigned on a platform to do it all over again."
Read more: Junior doctors reach improved pay deal to increase wages by 20 per cent over two years
Chancellor Reeves also said the autumn budget will "involve taking difficult decisions" on spending and tax, and will also include the budget for 2025/26 as part of a multi-year spending review.
She told MPs: "This is the beginning of a process, not the end. I am announcing today that I will hold a budget on October 30 alongside a full economic and fiscal forecast from the Office of Budget Responsibility.
"I have to tell the House that the budget will involve taking difficult decisions to meet our fiscal rules across spending, welfare and tax.
"(The Conservatives) still don't get it, do they? Parties in Downing Street, crashing the economy, gambling on the election, party before country every single time.
"It will be a budget to fix the foundations of our economy and it will be a budget built on the principles that this new Government was elected on."
She added: "Let me be honest, challenging trade-offs will still remain. So, today I am launching a multi-year spending review.
"This review will set departmental budgets for at least three years, providing the long-term certainty that has been lacking for too long. As part of that process, final budgets for this year and budgets for next year 2025/26 will be set alongside the budget on the 30th of October."
Reeves also said she would accept in full the recommendations of the independent pay review bodies.
"That is the right decision for the people who work in and, most importantly, the people who use our public services, giving hardworking staff the pay rises they deserve while ensuring that we can recruit and retain the people we need," Ms Reeves told the Commons.
She had earlier said: "The previous government had not held a spending review since 2021, that means they never fully reflected the impact of inflation in departmental budgets.
"This has had a direct impact on budgets for public sector pay.
"When the last spending review was conducted, it was assumed that pay awards would be 2% this year. Ordinarily, the Government is expected to give evidence to the pay review bodies on affordability, but, extraordinarily, this year the previous government provided no guidance on what could or could not be afforded to the pay review bodies.
"This is almost unheard of but that is exactly what they did."
It comes as the government announced it had agreed an offer to junior doctors to end a strike over pay which the British Medical Association (BMA) are recommending to their members.
Reeves told MPs: "Industrial action in the NHS alone cost the taxpayer £1.7 billion last year.
"Today marks the start of a new relationship between the Government and staff working in our National Health Service, and the whole country will welcome that."
