Rachel Reeves has warned “more difficult choices” are coming after axing winter fuel payment to those not in receipt of pension credit or other means-tested benefits in a bid to plug £22 billion black hole in public spending.
The chancellor unveiled plans to tackle the projected overspend, including cuts to winter fuel payments and infrastructure projects.
Speaking during the media morning round, Ms Reeves doubled down on accusations that Jeremy Hunt “lied” to the public and to MPs during the election campaign about the state of public finances.
It comes as she accused the previous Tory government of “covering up” the truth about the UK economy as she revealed the results of the Treasury spending audit she commissioned during a speech in the Commons yesterday.
A new Office of Value for Money, a Labour manifesto pledge, will start work right away to identify and recommend areas where the government can save money in the current financial year, she said.
The office is expected to announce public cuts worth billions to plug the gap in the public finances that could see the cancellation of projects including the road tunnel near Stonehenge and Boris Johnson’s New Hospital programme.
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Hunt: People will ‘smell rat’ with Reeves’s claims on public spending
Jeremy Hunt has said people will “smell a rat” with Rachel Reeves’ claims about the state of public spending.
The shadow chancellor told the BBC: “I think what will make most people smell a rat this morning is that on the one hand Rachel Reeves says there is a big black hole and on the other hand she finds 22 per cent, 10 times inflation, to pay junior doctors, nearly three times inflation for every other public sector worker without asking for any productivity improvements in return.”
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Salma Ouaguira30 July 2024 08:20
Labour has ‘failed another generation of families’ with cancellation of social care reforms, Dilnot says
The Labour government has “failed another generation of families” with the cancellation of a series of planned social care reforms, the architect of the plans has warned.
Rachel Reeves announced the cancellation of the Dilnot Reforms on Monday, alongside a swathe of other spending cuts to address a black hole in the public finances left by the previous Conservative government.
Sir Andrew Dilnot, whose government-backed commission proposed a cap on social care costs, described the changes as a “a tragedy”.
Our political correspondent Millie Cooke has the full story:
Salma Ouaguira30 July 2024 08:15
Tory leadership hopeful Robert Jenrick launches campaign video
Robert Jenrick has announced a series of “hard truths” to the Conservatives during a released leadership campaign video this morning.
He said: “The even harder truth is that the severity of these challenges now threatens our future.”
Mr Jenrick claimed the Tories are the country’s “best hope” but they “have a mountain to climb and real choices to make”.
The MP for Newark added: “We won’t regain people’s trust with platitudes. I believe our people and Parliament must be sovereign. I believe that anyone who comes here illegally must be deported within days. I believe that ending mass migration won’t be plain sailing. But we must do it.”
Salma Ouaguira30 July 2024 08:08
Scottish minister: Labour ‘should have known’ about state of public finances
Scottish public finance minister Ivan McKee said chancellor Rachel Reeves “absolutely should have known” about the need to make cuts when the new Labour government came to office.
The SNP Holyrood minister told BBC Scotland’s Good Morning Scotland: “Labour should have known about this. They’ve either been incompetent in not checking the numbers, which were readily available during the election campaign, or they’ve been very misleading about the process that’s happened here.”
When asked whether the cuts amounted to austerity he said the Chancellor had “been very clear that there will be more cuts coming on top of what’s already happened with the winter fuel payments, which is very concerning, so it’s absolutely austerity and there’s no doubt about that”.
He said the Scottish Government now had “some difficult decisions to make” and refused to commit to maintaining the universal aspect of the winter fuel payment benefit, adding that they still needed to to review the numbers around it as “we only got told about this 90 minutes before it was announced”.
He also took aim at Scottish Labour politicians who, he said, had ruled out a return to austerity: “During the election campaign Ian Murray said it was “mince” that there was going to be Labour austerity cuts as a consequence of electing a Labour government, so when you’ve got him on your programme maybe get him to eat that “mince” because he’s been absolutely proved wrong.”
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Salma Ouaguira30 July 2024 08:07
Starmer could visit Southport after knife attack
Sir Keir Starmer could visit the community reeling from the Southport knife attack on Tuesday, the chancellor suggested.
Asked whether the prime minister will be in the north-west seaside town, Rachel Reeves told Sky News: “I’m sure he will be and I know that the Home Secretary is already there.”
Reacting to the attack, she said: “Beyond the worst nightmare of any parent what’s unfolding in Southport. And my thoughts and prayers are with all of those families affected.
“And I also just pay tribute to the emergency services, particularly at Alder Hey Hospital having to treat the children and families who have been impacted by what happened yesterday.
“Nothing can prepare you for something like this. And I think everybody across our country today is thinking of that community and those families.”
Salma Ouaguira30 July 2024 08:05
Hunt ‘angered’ by Reeves’ black hole claim
Jeremy Hunt has said Rachel Reeves’ claim of the Tories leaving behind a £22billion shortfall on public finances made him “angry”.
The shadow chancellor slammed Ms Reeves’ statement to the Commons yesterday a “political exercise” in a bid to damage the Conservative Party.
He told the BBC Radio 4 Today programme that there were “big pressures on public finances” but his party had a plan to boost productivity to deal with them.
Salma Ouaguira30 July 2024 08:03
Reeves defends axing winter fuel payment warning ‘more difficult choices to come’
The chancellor has been pressed on whether she made the choice of axing winter fuel payment for pensioners to favour public sector workers.
Ms Reeves replied: “Their pay has fallen behind pay in the private sector this last decade. It’s the first time they’ve had a real terms pay increase in ten years. And I think that is right.”
She added: “We had to make difficult decisions yesterday. And the changes in the Winter Fuel Payment to restrict it to pensioners on Pension Credit was a difficult decision. But it’s one that will save the public purse £1.5nm a year.”
The minister insisted she is “not singling out any group” and there are “more difficult choices to come in the autumn”.
Salma Ouaguira30 July 2024 08:00
Cost of the junior doctors’ pay rise was £350m – Reeves
Rachel Reeves said the cost of the junior doctors’ pay rise was £350 million, on top of the £9.4 billion for wage increases for the rest of the public sector.
Asked how much it would cost to settle the junior doctors’ pay, the Chancellor told Times Radio: “It’s £350 million.”
She said that was a “drop in the ocean” compared to the £1.7 billion cost of industrial action to the economy last year.
Salma Ouaguira30 July 2024 07:54
Chancellor: ‘I am proud of our record’
Chancellor Rachel Reeves gas warned government took ‘difficult decisions’ to plug the £22bn black hole Labour claims the Tories have left in public finances.
She told Sky News: “There are difficult decisions, but that comes with government. I embrace those decisions even though they are not the decisions I would have wanted to make.
But she said the move is “to be able to make change that is profoundly rewarding and to be able to grow our economy and get us out of the mess we have inherited.”
She added: “I am proud of our record in the last three and a half weeks. And we have only got started.”
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Salma Ouaguira30 July 2024 07:51
COMMENT: There may be trouble ahead, but the Reeves plan might just work
With her fury-filled Commons statement on public overspending, the chancellor of the Exchequer accused the previous Tory administration of a cover-up – and may also have secured Labour a decade in power, says Andrew Grice:
Salma Ouaguira30 July 2024 07:50