Rachel Reeves has proposed the elimination of a number of winter fuel payments, in addition to a multitude of other government programs and policies, in order to address a predicted overspending of £22 billion by the government.
Those who are not now receiving pension credit will no longer be eligible to receive the additional funds, as the chancellor has stated on multiple occasions to members of parliament, “If we cannot afford it, we cannot do it.”
At the same time, the chancellor made the announcement that the adult social care charging reforms, which had been delayed by the previous government, would also not proceed under the watch of the new government. This decision will result in a savings of more than one billion pounds by the end of the following year.
It is anticipated that all departments will find savings totaling approximately three billion pounds, as stated by Ms. Reeves. On the other hand, a number of projects, such as Boris Johnson’s initiative to construct forty new hospitals and to rehabilitate ancient railway lines, will be terminated.
Taking responsibility for her choices, the chancellor pointed the finger of blame at the previous administration, accusing the Conservatives of having “let people down” by making “commitment after commitment without knowing where the money was going to come from.”
“Today I am calling out the Conservatives’ cover up and I am taking the first steps to clean up what they have left behind,” she stated in her statement.
The shadow chancellor, Jeremy Hunt, who was seated in the Commons opposite Ms. Reeves, instantly challenged her portrayal of the previous government at the time.
According to Ms. Reeves, the decision to eliminate winter fuel subsidies for certain retirees was a “difficult” one that she did not want to make.
“Those not in receipt of pension credit or certain other means tested benefits will no longer received the winter fuel payment from this year onward,” she informed the members of parliament.
For homes that are getting pension credit, the government will continue to offer winter fuel payments worth £200, or £300 for households that are receiving pension credit and have a member of their household who is above the age of 80.
“It is the responsible thing to do to fix the foundations of our economy and bring back economic stability.”
The announcement made by Ms. Reeves came after it was reported that the government had proposed a salary increase of 22.3% for junior physicians in an effort to put an end to strike action.
In spite of the fact that the Institute for Fiscal Studies issued a warning about the poor state of public finances during the election campaign, ministers have been trying to give the impression that the economy they inherited from the Conservatives is even worse than they had anticipated.
A cabinet minister named Pat McFadden made the following statement to Sky News in advance of Ms. Reeves’s speech: “What we have discovered since taking office a few weeks ago is that things were even worse than we thought, and the previous government was certainly guilty of running away from the situation.”
He used the example of the Rwanda plan, which had been predicted to cost 400 million pounds in the past.
In reference to the program that has since been scrapped, Mr. McFadden stated, “We have now discovered that it is 700 million pounds, with billions more to be spent in the future.”
Additionally, he proposed that the International Financial Services (IFS) and other analysts would “have to today like everybody else acknowledge that the budgetary pressures this year are higher than those set out in the OBR [Office for Budget Responsibility] forecast prior to the March budget.”
As a result of the Office of Budget Responsibility (OBR), Ms. Reeves “would have known about the state of the public finances” while she was serving in opposition, according to Helen Whately, the shadow transport secretary.
“Actually, while Labour is going out there and trying to tell everybody that it is all so difficult for them, this is just them setting a narrative for tax rises that they want to bring in later on,” the Tory MP said. “They want to bring in tax increases later on.”