Reeves said she had not wanted to strip winter fuel payments from millions of pensioners but was forced to by the “black hole” in the public finances….reports Asian Lite News
October’s budget will require “difficult decisions on tax, spending and welfare”, the chancellor, Rachel Reeves, has warned. Her comments came as the housing and planning minister, Matthew Pennycook, said plans to scale back winter fuel payments for pensioners in England and Wales would not be watered down, after dozens of Labour MPs abstained on a key Commons vote on Tuesday night.
Reeves also defended cutting winter fuel payments for all but the poorest pensioners as the “right decision”, as she spoke to broadcasters on a day when new figures showed the UK economy flatlined in July for the second month in a row.
“I’ve been really clear that the budget on 30 October will require difficult decisions on tax, on spending, and on welfare,” she told the BBC. “But the prize – if we can bring stability back to our economy, if we can bring investment back to Britain – is economic growth, good jobs, paying decent wages in all parts of our country, to realise the huge potential that we have.”
Reeves said she had not wanted to strip winter fuel payments from millions of pensioners but was forced to by the “black hole” in the public finances.
Meanwhile, Pennycook defended the government’s policy on the winter fuel allowance the morning after MPs voted to remove it from all but the poorest pensioners.
A Conservative motion to strike down the move was defeated by 348 votes to 228. Pennycook said he appreciated the concerns many colleagues had raised, but added: “We’re not going to water down that policy. We think it’s the right decision to make.”
Asked about the government’s decision to award pay increases to public sector workers while reducing winter fuel support, he told Sky News: “What this government has done is implement the recommendations of the independent public sector pay review bodies. Now, unless the opposition in parliament are saying they would have rejected those recommendations out of hand, allowed industrial action to continue, which was extremely costly to the UK economy, they would have faced that same decision.”
MPs voted to reject the Conservative motion on Tuesday by a majority of 120, with about a dozen Labour MPs thought to have deliberately abstained and one, Jon Trickett, voting against.
The veteran MP was joined by five of the seven Labour MPs who were suspended after voting to scrap the two-child benefit cap: Ian Byrne, Apsana Begum, Zarah Sultana, Richard Burgon and John McDonnell.
Burgon said on X: “For me, this was a matter of conscience. This cut is not only going to cause even greater hardship for so many pensioners in my constituency who are already living in poverty, but it will also cost lives.”
However, it will be the high number of abstentions that will worry Downing Street and Labour whips, with the government trying to use the debate to reiterate its argument that removing the winter fuel allowance from all but older people who receive pensioner benefits such as pension credit was a tough but unavoidable choice.
Among those who abstained after giving speeches was Rachael Maskell, the MP for York Central, who has been one of the most outspoken Labour critics of the plan and called for it to be delayed and rethought.
Pensioners, she said, “make the hardest budgetary decisions, harder than those of the Treasury, where there are choices. They have no choice. They have to put a roof over the head, they have to pay for their food, and they have to pay for their heating”.
Treasury refuses to disclose key details of £22bn fiscal ‘black hole’
The UK Treasury is refusing to provide key details of the £22bn fiscal “black hole” that chancellor Rachel Reeves claims to have discovered, with officials insisting they need more time to ensure the figures are accurate.
The Treasury’s stance will fuel doubts about the transparency of the Labour government, which has also refused to publish an assessment of the impact of means-testing winter fuel payments on 10mn pensioners.
Reeves has repeatedly brandished a near-£22bn departmental overspend in 2024-25 as evidence of irresponsible budget management by the Conservatives, paving the way for tax increases and spending cuts in next month’s Budget.
At prime minister’s questions in the House of Commons on Wednesday, Prime Minister Sir Keir Starmer repeatedly referred to the £22bn “black hole” as fact.
A Treasury document released at the end of July outlined the £22bn of “spending pressures”, in which Reeves accused former Tory chancellor Jeremy Hunt of covering up the true state of the UK public finances before the July general election.
But while government has given details of some categories, such as £9.4bn of public sector pay awards and a massive spending overshoot on asylum, the document did not provide a full breakdown of others.
A freedom of information request by the Financial Times asking for an exact breakdown of the figures was declined.
The response from the Treasury’s information rights unit said details would be published respecting agreed timelines “to allow the relevant officials time to complete the preparation of the information to ensure it is accurate and correct prior to publication”.
The largest chunk of unaccounted spending is £8.6bn earmarked for “normal reserve claims”.
The Treasury has said the £8.6bn includes items such as election funding, reclassification of the flood defences programme, and resettlement arrangements from Afghanistan — but has failed to quantify them.
Tom Pope at the Institute for Government think-tank said it was “not unreasonable” to expect the Treasury to give details of the reserve claims, given that other components of the £22bn had been itemised.
He added however that the Treasury may be hoping to shift some of the spending to other departmental budgets, and that officials therefore “want to keep discussions about this behind closed doors”.
ALSO READ: NHS must reform or die, warns PM