Winter fuel payments scrapped for millions of pensioners

Around 10 million pensioners will lose their winter fuel payments, under new plans announced by the Chancellor.

Rachel Reeves said people who do not receive pension credit or other means-tested benefits will not receive payments from this year.

Ms Reeves told parliament she had had to make “necessary and urgent decisions” because of the previous government’s “unfunded” and “undisclosed” overspending. Several major infrastructure projects were also cancelled.

Shadow Chancellor Jeremy Hunt has branded Labour’s claims “false” and said the Conservatives were open about public finances when in power.

Meanwhile, the public sector pay recommendations have been accepted in full, meaning increases of 5.5% for NHS workers and teachers, 6% for the armed forces, 5% for the prison service and 4.75% for the police.

The pay deals will cost an extra £9bn, two-thirds of which will be funded by central government, while a third is expected to come from savings within departments.

However, the bulk of Ms Reeves’ announcement focused on cuts due to what she called a “£22 billion hole in the public finances”.

Some economists, including the Office for Budget Responsibility (OBR) and the Institute for Fiscal Studies (IFS), appear to have backed some of Ms Reeves’ claims.

But his decisions have been called a “political choice” by economists and conservative politicians.

The following spending plans were abandoned:

Ms Reeves also said she would not proceed with a public sale of the government’s shares in NatWest, as her predecessor had planned to do, because it “would not represent good value for money”.

The plan to deport illegal migrants to Rwanda was also abandoned, in line with the Labour Party’s manifesto.

Ms Reeves said the previous government had committed to spending money it did not have and failed to tell the OBR.

Ms Reeves said the previous government’s unfunded spending included £6.4 billion on the asylum system, including the Rwanda programme, and £1.6 billion on transport.

The OBR said in a letter published on Monday that it had been “made aware of the extent of these pressures at a meeting with the Treasury last week”.

He said it could “be one of the largest spending overruns for the coming year compared to forecasts outside of pandemic years.”

As a result, it is reviewing how it prepared its forecasts for the March 2024 Budget and will assess “the adequacy of the information and assurances provided to the OBR by the Treasury in relation to departmental spending”.

Paul Johnson, director of the IFS, said the £6.4bn overspend on asylum this year was a “massive amount” that “really appears to have gone unfunded”.

He added, however, that “half of the [the] The “hole” in spending is public compensation on which the government made a choice and where the pressures were known.

Shadow chancellor Jeremy Hunt said Ms Reeves’ claims were “false”, accusing the government of misleading the public over tax rises.

“Taxes will have to go up, and she has chosen not to tell us,” he said, adding that Ms Reeves’ first budget would be the “biggest betrayal in history by a new chancellor”.

Labour has already said it will not borrow to fund its “day-to-day spending”, meaning it will only pay for things with money it has already raised through taxes.

However, Labour has also previously said it could borrow to invest, giving it some room to manoeuvre on projects like HS2.

During the election campaign, the Conservatives made similar commitments on taxes and spending.

Economists said at the time that both parties would have to either cut spending or raise taxes, in line with their own budget rules.