CHANCELLOR Rachel Reeves took aim at vulnerable pensioners as she heralded a new raft of cuts today, aimed at plugging a £22 billion black hole in public finances this year.
After a snap audit, Ms Reeves accused the previous Tory government of “covering up” the true state of the public’s finances, despite the Institute for Fiscal Studies issuing a stark warning ahead of the general election.
Paving the way for a prolonged era of austerity, the Chancellor warned of “difficult decisions" across spending, welfare and tax in the autumn Budget, which will take place on October 30.
She said the Tories had made a series of unfunded commitments, including for the Rwanda deportation scheme, which she said has cost more than £6.4bn this year alone.
Ms Reeves said that those who do not receive means-tested benefits and pensioners who do not receive pension credit will no longer receive winter fuel payments.
End Fuel Poverty Coalition co-ordinator Simon Francis called it a “dangerous decision” which could condemn many pensioners to living in cold, damp homes this winter.
Charity Age UK director Caroline Abrahams said that as many as two million pensioners in dire need of the money won’t receive it.
She said it is certain to “result in more older people experiencing a horrible ‘eating or heating’ dilemma,” adding that it will “potentially jeopardise their health as well as their finances — the last thing they or the NHS needs.”
Ms Reeves said there will be no reform to adult social care charges — despite Health Secretary Wes Streeting promising last month to continue the plan to cap lifetime care costs.
The Chancellor also announced that the Tory plan to build 40 hospitals by 2030 would be axed, and that works on the Stonehenge tunnel, A27 and Restoring our Railway schemes would be scrapped, while the transport secretary will review £800m in “unfunded” transport projects.
Professor Richard Murphy of Sheffield University Management School said that Ms Reeves intends a “draconian round of austerity while refusing to increase taxes on the wealthy.”
He said: “The message from today is clear: the wealthy will be supported by Labour. The vulnerable will not be.”
Unite general secretary Sharon Graham warned that Labour must “now rule out austerity Mark II and deliver a serious plan for a fairer society.”
She added: “It is clear, irrespective of ‘black holes,’ that we need to consider a wealth tax.”
According to Resolution Foundation, reforms to capital gains tax and inheritance tax could collectively raise almost £10 billion.
Ms Reeves did however announce she would accept full recommendations of independent pay review bodies covering key workers including teachers, nurses, police and armed forces.
She said it was the “right decision for the people who work in and most importantly, the people who use our public services.”
TUC general secretary Paul Nowak said: “I hope this is the crucial first step in dealing with the recruitment and retention crisis blighting our schools and hospitals.”
The Chancellor confirmed that junior doctors have been offered an improved pay deal, with a package representing a pay rise of about 22.3 per cent over two years.
The BMA’s junior doctors' committee has recommended the offer to its members, who will now vote on the deal.
Ms Reeves also announced a 5.5 per cent pay deal for teachers.
National Education Union (NEU) general secretary Daniel Kebede welcomed it as a “necessary first step” in the reversal of the real-terms pay cuts of the last decade, but said there is “still some way to go.”
