Rachel Reeves has revealed plans to tackle a projected overspend of £22 billion, including cuts to winter fuel payments and infrastructure projects.
In a speech in the House of Commons on Monday, the chancellor accused the previous Tory government of “covering up the true state of the public finances” as she revealed the results of the Treasury spending audit she commissioned.
Ms Reeves said she is taking the “difficult decision” that those not in receipt of pension credit or other means-tested benefits will no longer receive the winter fuel payment from this year onwards.
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.
Key Points
- Chancellor scraps winter fuel payments for pensioners
- Reeves accuses Tories of ‘spending like there was no tomorrow'
- Pay rises for NHS, prison, police, armed forces staff and teachers
- Tories urged to ‘apologise to the country’ for state of the economy
- Jeremy Hunt tells Reeves to ‘stop trash-talking’ the economy
- OBR announces review into Tories’ spring budget forecast
Fully funded 5.5% pay rise for teachers hailed important ‘first step’ by unions
18:55
Tom Watling
A fully funded 5.5 per cent uplift to the salaries of teachers and headteachers in England is an important “first step” in reversing real-terms pay cuts which school staff have faced, union leaders said.
The Government has accepted the recommendations of the School Teachers’ Review Body (STRB) “in full” and teachers’ pay will increase by 5.5 per cent.
The Department for Education (DfE) said the pay award is equivalent to an increase of more than £2,500 for the average teacher from September, which would take the median salary for 2024/25 to over £49,000.
Schools will receive nearly £1.2 billion of additional funding in the 2024/25 financial year to help cover the costs of the teacher pay award and support staff pay offer, the Education Secretary has announced.
There may be trouble ahead, but the Reeves plan might just work
18:40
Tom Watling
Reeves’ press conference finishes
18:31
Tom Watling
Chancellor Rachel Reeves’ press conference following her speech to Parliament earlier today has finished.
Reeves: Cuts and spendings savings will continue into next year
18:24
Tom Watling
Cuts and spendings savings will continue into next year because of the enormity of the “black hole” produced by the Tories, says Rachel Reeves.
The chancellor said: “The black hole is not just for this year.
“The cuts and spendings savings that we announced today will continue into next year.”
IN full: Government to ‘conduct a complete review’ of New Hospitals Programme
18:20
Salma Ouaguira
The government will conduct a “complete review” of the New Hospital Programme, chancellor Rachel Reeves has said.
The initiative, announced four years ago by the Conservatives, committed to the construction of 40 new hospitals in England by 2030.
However, Ms Reeves told the House of Commons on Monday that the previous government maintained the commitment “without anywhere close” to the cash needed to deliver it.
“In October 2020, the government announced that 40 new hospitals would be by 2030,” she said.
“Since then, only one new project has opened to patients and only six have started their main construction activity.
“The National Audit Office was clear that delivery was widely off track.
“But since coming into office, it’s become clear that the previous government continued to maintain its commitment to 40 hospitals without anywhere close to the funding required to deliver them.”
Reeves: There will be more difficult decisions ahead
18:19
Tom Watling
Asked about whether Labour increases in the Autumn budget, she said: “I don’t want to increase taxes on working people. We stand by those commitments.
“The truth is, we did not know about the black hole … and so there will be more difficult decisions ahead around spending, around welfare and around tax at the budget and spending review later this year.
“I think it is important to be honest with people [about that].”
Reeves says she will ‘not duck difficult decisions’
18:13
Tom Watling
Rachel Reeves has said she will “not duck the difficult decisions” to help the economy as she holds a press conference in London.
“I will not duck the difficult decisions to bring stability back to our economy,” she said.
Have your say: Is it time for junior doctor strikes to finally end?
18:10
Salma Ouaguira
Junior doctor strikes may soon end following a government proposal offering a 20% pay increase.
Health Secretary Wes Streeting and the British Medical Association (BMA) have negotiated a deal to be voted on by junior doctors.
This deal includes an overall pay rise of 20%, valued at £1 billion, with a backdated 4.05% increase for 2023-24 on top of an existing 8.8-10.3% rise. For 2024-25, junior doctors would receive an additional 6% pay rise plus a consolidated £1,000 payment.
Is the deal struck by Streeting and the BMA enough to end the junior doctor strikes? Or do you think industrial action should continue?
Share your thoughts by adding them in the comments — we’ll highlight the most insightful ones as they come in.
Reeves holds press conference
18:09
Tom Watling
Rachel Reeves has just begun a press conference taking questions over public spending.
ICYM: Reeves claims Conservatives ‘gave false hope to Britain'
18:00
Salma Ouaguira
Rachel Reeves has told MPs the Conservatives “gave false hope to Britain”.
The Chancellor said in her spending inheritance statement: “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.”
Prospect union welcome ‘first step’ of civil servants pay rise
17:50
Salma Ouaguira
Mike Clancy, general secretary of the Prospect union, said a 5% pay rise for civil servants is a “welcome first step”.
He said: “When I met the new cabinet office ministers last week, alongside other civil service unions, I made clear that members wanted to see a new approach by government to the civil service, one built on respect and a recognition of the crucial role that members play in delivering the government’s missions.
“While we welcome the significant improvement in real value, and relative position compared to other public sector workers in the recent past, it remains our view that the pay remit process is flawed and an irretrievably broken process.
“We have already indicated our desire to work constructively with ministers and officials to build a process that is fit for purpose and delivers fair rewards and progression.”
ICYM: Cuts for pensioner benefits as Reeves blames £22bn black hole on Tories
17:40
Salma Ouaguira
Public sector workers are in line for a pay rise but 10 million pensioners will lose out on winter fuel payments in an attempt to fill a £22 billion black hole in the public finances, the Chancellor has announced.
Rachel Reeves said she was making “difficult decisions” as she accused the previous government of leaving £21.9 billion of unfunded commitments that it had “covered up from the country”.
In a statement to Parliament, she set out “immediate action” to address the shortfall by £5.5 billion, with the rest of the gap to be addressed at a Budget on October 30.
But predecessor Jeremy Hunt claimed around half of the “black hole” in spending was due to her deciding to give above-inflation pay rises to millions of public sector workers.
In a hint that taxes may have to increase, Ms Reeves said: “I have to tell the House that the Budget will involve taking difficult decisions to meet our fiscal rules across spending, welfare and tax.”
She said 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”.
One of the actions set out by the Chancellor on Monday involved introducing a means test for the winter fuel payment.
That policy is expected to reduce the number of pensioners in receipt of the payment by 10 million, from 11.4 million to 1.5 million, saving some £1.4 billion this financial year.
The payment is a devolved matter in Scotland and Northern Ireland.
IFS chief dismisses Rachel Reeves’ ‘cover up’ claim
17:30
Salma Ouaguira
Director of the Institute of Fiscal Studies Paul Johnson has rejected Rachel Reeves’ claims that she was unaware about the state of public finances before the election.
Mr Johnson said people were kept in the darker spending asylum system but he claimed Labour knew about the state of the economy.
Taking to social media, he said:
1 Last govt left public finances in bad state; 2 it does appear that funding for eg asylum was not provided
— Paul Johnson (@PJTheEconomist) July 29, 2024
but 3 c. half of spending "hole" is public pay over which govt made a choice and where pressures were known; and 4 overall challenge for spending was known and remains
NatWest retail share sale ditched for being ‘bad use’ of taxpayer cash
17:23
Salma Ouaguira
Plans for a retail share sale in banking giant NatWest will be scrapped as they are a “bad use of taxpayer money”, the new Chancellor has announced.
Rachel Reeves revealed that the new Labour Government has ditched the Tory aims to launch a “Tell Sid”-style share sale of its remaining 20% stake in the lender.
The former Government had been planning to launch a share sale in NatWest to retail investors this summer, before it was put on hold due to the surprise July 4 General Election announcement.
Ms Reeves told the House of Commons: “We intend to fully exit our shareholding by 2025-26.
“But having considered advice, I have concluded that a retail share sale offer would involve significant discounts that could cost taxpayers hundreds of millions of pounds.
“It would therefore not represent value for money.”
She added: “It will not go ahead. It’s a bad use of taxpayer money and we will not do it”.
Decision to end universal winter fuel payments ‘too narrow’, says Martin Lewis
17:17
Salma Ouaguira
The Chancellor’s decision to end the previously universal winter fuel payment for pensioners unless they are on benefits has been branded “too narrow with the winter we have coming”.
The payments of up to £300 have been made available to everyone above state pension age.
However, from this winter pensioners will only receive a payment if they are receiving pension credit.
The Treasury said the winter fuel changes would see the number of pensioners receiving the payments fall from 11.4 million to 1.5 million – so just under 10 million would miss out.
Martin Lewis, founder of MoneySavingExpert, immediately warned the targeting of the payments was “too narrow with the winter we have coming”, adding: “The energy price cap is likely to rise 10% this October and stay high across the winter, leaving most energy bills nearly double those pre-crisis, at levels unaffordable for millions.”
He added: “Plus, with this announcement, the Government has a huge moral imperative to ensure the 800,000 people eligible for pension credit who don’t get it, are informed, educated and helped through the process.
“It is planning an awareness-raising campaign, but it needs to ensure that reaches every corner – and, if possible, proactively and personally contact people.
“Pension credit is a crucial gateway benefit, giving access to a host of other entitlements, and now with the link to the winter fuel payment, it makes it even more important to ensure fewer miss out.”
Cabinet ministers confirm pay rises for public departments
17:13
Salma Ouaguira
Police officers in England and Wales are in line for a 4.75% pay rise from September.
Home secretary Yvette Cooper said officers of all ranks will receive the extra money this year.
In a written statement to parliament, she said the government “values the vital contribution of police officers across the country who work tirelessly to keep us safe every single day” as she confirmed it was accepting recommendations from the Police Remuneration Review Body in full.
The Home Office “will provide £175 million additional funding in 2024-25 to forces to help with the cost of the pay increase”, she said, adding: “While the recommendation for a consolidated award of 4.75% is significantly above what had been budgeted for in the 2021 spending review, it is right that we accept it in full.
“Police officers have a crucial role to play in delivering the Government’s manifesto commitments to make Britain’s streets safe and increase public visibility through neighbourhood policing.”
Some National Crime Agency officers are also due to receive a 5% pay rise, which in a separate statement Ms Cooper said will be funded from the organisation’s existing budget.
“I am confident it will greatly support the agency’s efforts to eradicate the most dangerous organised crime groups operating within and against the UK,” Ms Cooper added.
Justice secretary Shabana Mahmood announced a 5% pay award for some prison officers and staff, with a “targeted focus on the lowest paid”, and a 6% rise for the judiciary.
Rachel Reeves’ spending axe at a glance: What was in Chancellor’s speech?
17:09
Salma Ouaguira
Rachel Reeves has announced billions of pounds in spending cuts, after ordering the Treasury to carry out an audit of the UK’s public finances.
The chancellor said her aim was to “expose the scale of what has been uncovered” after Labour came to power, pointing to a £22 billion black hole left by the previous government.
Here is a quick look at the headline announcements from Ms Reeves’ speech in the House of Commons.
- £22 billion spending black hole: Ms Reeves told the Commons Labour had inherited “a projected overspend of £22 billion” beyond what the previous government had planned for, which she said the Tories had “covered up”.
- Overspends: The projected overspend by the previous Tory government on the asylum system, including the “failed” Rwanda plan, was more than £6.4 billion for this year alone, she said.
- Ukraine: There is “not enough money set aside for the reserve” to fund costs associated with Ukraine, the Chancellor said.
- Pay rises for doctors, teachers and other public sector workers: Among the pay offers was a deal agreed with junior doctors which will see them get a 20% pay rise over two years in a bid to resolve their long-running pay dispute with the government.
- Advanced British Standard: Rishi Sunak’s proposed new qualification, due to bridge the gap between A-levels and T-levels, will not go ahead.
- Pensions and social care: Adult social care charging reforms delayed by the Tories will not be taken forward, saving more than £1 billion by the end of next year, she also announced.
- Budget date set: October 30 will be the date of the new government’s first budget. The chancellor it will involve taking “difficult decisions” to meet Labour’s fiscal rules, and said this would include decisions on spending and tax.
- Office of value for money: The government will set up a new watchdog aimed at ensuring all public spending provides value for money.
Schools union welcomes 5.5% pay rise for teachers
17:02
Salma Ouaguira
A school leaders’ union boss has welcomed the additional government funding to cover a 5.5% pay rise for teachers amid “stretched” budgets.
Paul Whiteman, general secretary at school leaders’ union NAHT, said: “Leaders and teachers will welcome today’s above-inflation pay offer – it is another clear sign that the new Government is serious about resetting the relationship with the profession.
“While pay remains below 2010 levels in real-terms, a 5.5% uplift is a significant step on the journey towards pay restoration, which we have long called for.
“We are currently in the midst of the worst recruitment and retention crisis in living memory – in part because under the last government the pay of leaders and teachers was cut by 20% in real terms.”
He added: “We are particularly pleased the Chancellor has pledged additional funding for this deserved pay rise, which is crucial at a time when many school budgets are stretched.”
Reeves: Tories’ austerity resulted in growth haemorrhaging in last parliament
17:01
Salma Ouaguira
Chancellor Rachel Reeves has said Labour will not “return to austerity” despite outlining difficult decisions to be made in the upcoming budget.
Labour MP Jon Trickett (Normanton and Hemsworth) said: “I welcome the chancellor’s statement about public sector pay, but isn’t it clear though that after savaging public services, holding down public sector pay, driving three million people into the food banks, that this crazy austerity ideological programme of the Tories failed massively, but at the same time the richest 250 people in the country gained wealth of £500 billion.
“Can I tempt the chancellor to say that there are hard decisions to make we accept, that we reject the ideological commitment to this form of Tory austerity?”
Ms Reeves replied: “I think that we do owe it to our armed forces, our prison officers, our police forces, our nurses and our teachers to reward them properly for the work that they do, and that’s what we did today in implementing in full the recommendations of the pay review bodies.
“I would also echo the views of (Mr Trickett) that a return to austerity would be no way to run our economy. It resulted in growth haemorrhaging in the last parliament and all the damage that did both to living standards and money for public services.”
Reeves: Tories should ‘apologise to the country’ for ‘cover up’ in public finances
16:59
Salma Ouaguira
Rachel Reeves has accused every member of the last Tory cabinet of being “complicit” in the inheritance left behind in public finances.
The chancellor said: “I don’t believe there is any member of the previous cabinet who could have not been aware about the scale of this cover up and the scale of their spending.
“They should hang their heads in shame and instead of coming to the chamber today issuing platitudes they should have done the right thing and apologise to the country.”
Lib Dems urge chancellor to take their measures to support public services
16:53
Salma Ouaguira
Liberal Democrat MP for Richmond Park Sarah Olney has urged Chancellor Rachel Reeves to draw from their party’s revenue-raising measures to support public services instead of allowing “working people to pick up the tab” through tax rises.
She told the Commons: “The outgoing Conservative government will go down in the history books as one of the most damaging administrations our country has seen and today’s statement has thrown that picture into even more stark relief.
“It wasn’t just their catastrophic mini budget, we saw a vicious cycle of stagnation and recession driven by years of chaos and uncertainty.”
She added: “Over the last parliament we saw the Conservative Party raise taxes on hardworking households again and again just to pay for its own mistakes.
“So, will the Chancellor agree with me that it would be unfair to ask working people to pick up the tab a second time after they already suffered through years of painful tax raises? My party has set out detailed proposals to raise funding for our public services in a fair way.
“For example, by reversing the Conservatives’ tax cuts for big banks, putting in place a proper windfall tax on oil and gas producers, and raising the digital services tax on social media giants.”
TUC union: Reeves ‘right’ to accept independent pay review bodies recommendations
16:47
Salma Ouaguira
The TUC union said chancellor Rachel Reeves is “right” to accept the recommendations of the independent pay review bodies.
TUC general secretary Paul Nowak said: “If we want to repair and rebuild our country – and secure higher growth – we need strong public services, investment in infrastructure and a plan to make work pay.
“That’s why the Chancellor is right to respond positively to the recommendations of the pay review bodies.
“Her approach stands in stark contrast to the previous government, who played political games with the pay review bodies.
“I hope this is the crucial first step in dealing with the recruitment and retention crisis blighting our schools and hospitals. And it will need to be accompanied by a long-term plan for the public sector workforce.
“The Tories’ toxic economic legacy – which has been laid bare for all to see – cannot be allowed to define our future. Working people have paid the price for far too long.
“We shouldn’t shy away from having a national conversation about how we fairly tax wealth. Policies like equalising capital gains tax with the taxes paid on earnings will ensure those with the broadest shoulders pay their fair share.”
FDA union hails public sector pay rises the ‘right decision’
16:46
Salma Ouaguira
The FDA union which represents civil service professionals welcomed Chancellor Rachel Reeves’ announcement that civil servants will receive a pay rise of up to 5%.
FDA general secretary Dave Penman said: “This pay rise for civil servants is clearly the right decision.
“For too long we’ve seen pay eroded due to short-term decision-making, with a broken pay system leading to record churn in the civil service and causing a crisis in recruitment and retention across the public sector.
“I appreciate that this announcement comes against a challenging economic backdrop and some departments may have some difficult decisions to make to achieve the efficiencies outlined by the Chancellor, but I welcome that the Government has recognised that public sector pay must be a priority.
“If we want world-class public services then we must invest in the public servants that deliver them, and this announcement is the first step in the right direction.
“There is still significant work to do and the FDA will continue to engage with the Government to improve the pay system so that it properly rewards hard work, attracts the skills and expertise we need, and provides the necessary progression to attract and retain talent.”
OBR announces review into Tories’ spring budget forecast
16:41
Salma Ouaguira
The UK’s economic watchdog has announced a review into how the former government prepared its forecasting for the spring budget, after the Chancellor said she had identified £22 billion worth of overspending.
Richard Hughes, chairman of the Office for Budget Responsibility, said he was only made aware of the extent of pressures on departmental budgets after meeting with the Treasury last week.
“If a significant fraction of these pressures is ultimately accommodated through higher DEL (department expenditure limits) spending in 2024-25, this would constitute one of the largest year-ahead overspends against DEL forecasts outside of the pandemic years,” he wrote in a letter published on Monday afternoon.
Mr Hughes said he was concerned about the “transparency and credibility” of existing forecasting and spending plans.
Watch: Reeves and Hunt in fiery clash over public finance black hole: ‘How dare they?’
16:38
Salma Ouaguira
In full: Winter fuel payments scrapped for people not on benefits or pension credits
16:38
Salma Ouaguira
Rachel Reeves has announced that older people not in receipt of pension credits or other means tested benefits will no longer receive winter fuel payments from this year onwards.
The Chancellor on Monday announced a series of spending cuts to address a black hole in the public finances left by the previous Conservative government.
The winter fuel payment is a payment of between £250 and £600 to help people over the age of 66 with their heating bills.
Ms Reeves admitted that scrapping the payments for some people was “not a decision I wanted to make”, but said it is the “responsible thing to do”.
Chancellor confirms public sector pay rises
16:35
Salma Ouaguira
In total, the treasury will splash £9.4billion to raise wages for public sector workers. Two thirds of the sum will be funded by central government, and the rest will be payed for from departments savings.
Here’s a breakout into pay rises for public sector workers:
- NHS workers and teachers will receive a 5.5 per cent pay rise.
- Armed forces staff will get a 6 per cent increase.
- Prison service workers will be granted a pay rise of 5 per cent.
- The police will get a pay increase of 4.75 per cent.
Treasury releases audit on '£22bn black hole’
16:27
Salma Ouaguira
The Treasury has now published the audit Rachel Reeves commissioned on the state of public finances after the Tories left government.
The report has detailed how the cabinet office came up with the £22bn for the size of the “black hole” in spending plans.
Reeves calls Hunt to ‘apologise to the public’ for state of economy in clash
16:21
Salma Ouaguira
In a fiery clash, Rachel Reeves has called out Jeremy Hunt for not apologising to the public about the state of the economy.
The chancellor said: “The shadow chancellor had an opportunity this afternoon to admit what he had done, the legacy that he had left. Instead, he takes no responsibility.
“The word the country was looking for today was sorry. The shadow chancellor could not find those words.
“No wonder the party opposite so definitively lost the trust of the British people at the election three and a half weeks ago.
“And we say, never again. Never again should a party who plays fast and loose with a public finance should be in charge of the public finances.”
Hunt tells Reeves to ‘stop trash-talking’ the economy
16:19
Salma Ouaguira
Shadow chancellor Jeremy Hunt has told Rachel Reeves to “stop trash-talking” the economy.
In his response to chancellor Rachel Reeves’ spending inheritance statement, Jeremy Hunt said: “If you’re in charge of the economy, it’s time to stop trash-talking it.
“What’s the point of going to New York or Brazil to bang the drum for more investment if you come home with a cock-and-bull story about how bad everything is?
“She should stop playing politics with Britain’s reputation and get on with running the economy.”
The Conservative shadow chancellor claimed Labour had inherited a forecasted 4.4% deficit compared with 10.3% when Labour left office in 2010.
Mr Hunt continued: “The Conservatives came to office then being honest about our plans and saying very straightforwardly, we needed to cut the deficit, whereas she’s just won an election telling us repeatedly taxes will not go up.
“How many seats were won on the back of commitments not to raise tax while she’s quietly planning to do the exact opposite?”
What is the Stonehenge tunnel on the A303 that will be axed?
16:17
Jabed Ahmed
The A303 Stonehenge project would have seen the A-road which runs alongside the historic landmark converted into a tunnel beneath it, with more lanes.
It is estimated the ongoing project will cost £1.9bn overall, and has reportedly already cost £166 million. It has been subject to legal battles since it was first approved in 2020, with work being cancelled and reopened several times.
National Highways say the project with drastically reduce travel times along the stretch of road from about an hour to just eight minutes. Campaigners argue the project will irreversibly damage Stonehenge’s surrounding landscape, which also has archeological value.
Ms Reeves confirmed the project will be scrapped.
What tax rises could Labour introduce in the October budget?
16:15
Jabed Ahmed
Rachel Reeves announced a budget will be held on 30 October. The Budget will involve taking difficult decisions to meet the government’s fiscal rules across spending welfare and tax, she said.
The chancellor repeated Labour’s manifesto commitment to not increase national insurance, income tax or VAT.
A report will be published to close tax loopholes and tax avoidance to recover public finances, she added.
Other measures that could be considered are changes to capital gains and inheritance tax.
Hunt: Labour had access to Treasury dossiers before election campaign
16:13
Salma Ouaguira
Jeremy Hunt has claimed the Labour cabinet had access to the dossiers in the Treasury before the general election campaign.
The shadow minister said: “She says the information is new but she herself told the Financial Times ‘you don’t need to win an election to know the state of public finances as we’ve got the OBR now’
He then claimed the state of public finances “were apparent to anyone who dared to look”, adding: “Her argument is not credible and it won’t wash.”
Hunt said: “We are now expected to believe a multibillion blackhole has now magically emerged.
“Since January, and in line with constitutional conventions, she has had privilege access to the Permanent Secretary of the Treasury.”
Jeremy Hunt hits back at Reeves £20bn black hole claim
16:08
Salma Ouaguira
Shadow chancellor Jeremy Hunt is now hitting back at Rachel Reeves after she set out the “huge cover up” the Tories left in public finances.
He said Rachel Reeves’ spending inheritance statement is “not economic, it’s political”.
From the Conservative frontbench, Mr Hunt was cut off by shouts in the Commons chamber when he said: “Today, she will fool absolutely no-one with a shameless attempt to lay the grounds for tax rises she didn’t have the courage to tell us about.”
He added: “She says the information is new, but she herself told the Financial Times, ‘you don’t need to win an election to find out the state of public finances as we’ve got the OBR (Office for Budget Responsibility) now’.
“Paul Johnson of the IFS (Institute for Fiscal Studies) says the state of public finances were apparent pre-election to anyone who cared to look, which is why he and other independent figures say her argument is not credible and won’t wash.”
The shadow chancellor later said: “Today’s exercise is not economic, it’s political.
“She wants to blame the last Conservative government for tax rises and project cancellations she’s been planning all along.”
What is the universal winter fuel payment?
16:05
Jabed Ahmed
The chancellor has confirmed she is ending universal winter fuel payments, which are currently paid to all pensions.
She said those not receiving pension credits or other means tested benefits will not receive winter fuel payments from this year onwards.
Under the previous plans, those born before September 25, 1957, could have received between £250 and £600 to help pay for the heating over the winter period.
Most received the grant, which was available to those on a State Pension, Pension Credit, Carers Allowance and Income Support.
Reeves accuses Tories of ‘spending like there was no tomorrow'
16:05
Salma Ouaguira
Ending her statement to the House of Commons, the chancellor has accused the Conservative government of “spending like there was no tomorrow”.
She said: “After the chaos of Partygate, when trust in politics was they gave false hope to Britain.
“When people were already being hurt of their cost of living crisis, they promised solutions they knew they could never be paid for. Roads that will never be built, public transport that will never arrive, hospitals that will never treat a single patient.
“They spent like there was no tomorrow because they knew that someone else will pick up the bill.”
Boris Johnson’s new hospitals programme axed
16:01
Salma Ouaguira
Rachel Reeves has confirmed Boris Johsnon’s pledge to build 40 new hospitals by 2030 is set to be scrapped.
In a move to save up £3billion from public spending, she said only one new hospital was opened patients and only six are under construction.
The chancellor confirmed a complete review will be carried out into the programme.
Ms Reeves said there will be no reform to adult social care charges as it will not be possible.
What are the A-level reforms Rachel Reeves has axed?
15:58
Jabed Ahmed
Rachel Reeves has cancelled Rishi Sunak’s reforms to A-Levels to save money.
In October last year, Mr Sunak announced his plan to scrap A-levels and replace it with a new qualification called the Advanced British Standard (ABS) aimed at creating the “best education system in the western world”.
The former prime minister told the Conservative party conference last year he would merge A levels and technical T-levels into the brand new ABS to create “parity of esteem” between academic and technical subjects.
But Mr Sunak’s plan was immediately dismissed as “pie in the sky” by teaching unions – after Downing Street admitted that it may take 10 years to introduce.
Under the plan, sixth formers would be required to study five subjects rather than three under the new ABS qualification.
Ms Reeves said the plans would costs nearly £200 million next year, and Mr Sunak had not put any money aside to pay for it.
Breaking: Reeves makes ‘difficult decision’ to scrap winter fuel payments for pensioners
15:57
Salma Ouaguira
Winter fuel payments for some pensioners will be scrapped, the chancellor has confirmed.
The move means that those not in receipt of pension credit or other means-tested benefits will no longer receive the winter fuel payment from this year onwards.
She told the House of Commons: “This level of overspend is not sustainable. Left unchecked, it is a risk to economic stability and, unlike the party opposite, I will never take risks with our country’s economic stability.
“So, it therefore falls to us to take the difficult decisions now to make further in-year savings. The scale of the situation we are dealing with means incredibly tough choices.
“I repeat today the commitment that we made in our manifesto to protect the triple-lock but today I am 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 to 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 I expected to make – but these are the necessary and urgent decisions that I must make.”
Chancellor cancels ‘unfunded transport projects’ including Stonehenge tunnel
15:56
Salma Ouaguira
Rachel Reeves has announced that a £150m investment fund announced by Jeremy Hunt last year has been scrapped as no projects were supported.
On leveling up, she claimed her Treasury audit found £1billion of “unfunded transport projects” from the Tories that will now be reviewed.
Ms Reeves claimed these include the Stonehenge tunnel on the A303, and the A27 Arundel bypass.
The restoring our railways scheme will also be stopped as there was no money for them.
She added the sale of the government’s owned NatWest shares will be stopped by 2025/2026.
Pictured: Jeremy Hunt reacts to Rachel Reeves announcement
15:52
Salma Ouaguira
Reeves unveils ‘difficult decisions’ to save up £3billion
15:49
Salma Ouaguira
The chancellor has announced public departments will have to save up a total sum of £3bilion to make up for the blackhole in public spending.
She said: “I ask all departments to find savings to absorb as much of this as possible at least £3billion.
“I will work with them to find savings ahead of the Autumn budget including to stop non-essential spending on consultancy and communications.
“I am taking action to find two per cent savings in their back savings costs.”
Reeves: Tories did not have enough money to support Ukraine
15:46
Salma Ouaguira
The chancellor has accused the previous government of having not enough money to support Ukraine.
She said spending on military support to Ukraine did not have sufficient money set aside.
But promised Labour will continue to honour the promises made.
Chancellor announces £20bn black hole in public finances
15:43
Salma Ouaguira
Rachel Reeves has announced the government’s funding review has found:
- A budget with “pressures” of £35bn in budget which represents £22bn “projected overspend” for the current spending year.
- The Office for Budget Responsibility was not aware of some of the spending commitments and the Tories “misled” the OBR.
- Policies on the asylum system was projected to be overspending by £6.4bn.
- The transport budget was projected to overspend by £1.6bn.
Labour ‘did not know’ real situation of public spending
15:40
Salma Ouaguira
Rachel Reeves said she was “honest” during the campaign around the difficult choices that the government would take with the current state of the economy.
The chancellor said the British people knew and it’s “why they voted for change”. She added it was clear there were details she “did not know” before the election.
Reeves accuses Tories of public finances ‘cover up'
15:38
Salma Ouaguira
The chancellor has accused the previous government of “covering up” the real state of public finances during the election campaign.
She told the Commons: “Things the party covered up from the opposition, covered up from this House, covered up from the country.”
Ms Reeves said she has set out a detailed audit for the real spending situation.
Rachel Reeves delivers speech in the Commons
15:36
Salma Ouaguira
Before delivering her statement, the chancellor has payed tribute to the victims of Southport.
Announcing the key points of her speech, she said she is first announcing the state of the public finances, then setting up the immediate action to deal with the inheritance and a longer term plans to fix the “foundations of the economy”.
Cooper calls for ‘major overhaul of the system’ to tackle violence against women and girls
15:31
Salma Ouaguira
Home secretary Yvette Cooper has said a “major overhaul of the system” is required to combat violence against women and girls.
Shadow home secretary James Cleverly said the issue “is an incredibly important agenda and it builds upon the work that the previous government, my government, put forward in this area”.
He added: “We’ve seen an increase in arrest rates for violence against women and girls, up by 25% between 2019 and 2022/23, and a 38% increase in charge rates for rape over the year-to-year period.
“But we recognise there is significant and regular under-reporting of violence against women and girls, and I want to make sure that (Ms Cooper’s) agenda doesn’t inadvertently dissuade women from coming forward.”
Ms Cooper said: “We need to be addressing the prevalence of violence against women and girls, not simply the reporting, because there are many areas where we know that reporting needs to increase.”
She added: “The thing I would just say to (Mr Cleverly) is when he talked about the increase in charge rates, if you increase a very, very small number by a little bit, it’s still a very small number. The charge rate is still way way too low.
“So, this needs a major overhaul of the system. I look forward to working with his party and to working with all parties in order to do this. But we have to be very honest with ourselves about the damage that has been done.”
PM condemns ‘horrendous and deeply shocking’ Southport stabbing
15:28
Salma Ouaguira
In a post on X, prime minister Sir Keir Starmer said the incident in Southport was “horrendous and deeply shocking”.
He said: “Horrendous and deeply shocking news emerging from Southport. My thoughts are with all those affected.
“I would like to thank the police and emergency services for their swift response.
“I am being kept updated as the situation develops.”
Horrendous and deeply shocking news emerging from Southport. My thoughts are with all those affected.
— Keir Starmer (@Keir_Starmer) July 29, 2024
I would like to thank the police and emergency services for their swift response.
I am being kept updated as the situation develops.
Tory leadership rivals face ‘yellow card’ system to avoid civil war
15:25
Salma Ouaguira
Conservative leadership hopefuls will be named and shamed by party chiefs if they abuse rivals as the Tories seek to avoid all-out civil war.
Six senior Tories will battle it out to replace Rishi Sunak as the Conservative Party seeks to rebuild after its worst-ever general election result, with the new leader named on November 2.
Bob Blackman, chairman of the backbench Conservative 1922 Committee which is organising the contest, has introduced a “yellow card” system to issue warnings to campaigns if they cross the line in attacks on rival candidates.
He said: “The situation with the yellow car
