Rachel Reeves was forced into a humiliating partial climbdown after confirming changes to her hated winter fuel cut will come in time for winter. The Chancellor said adjustments to the scheme will be in place so OAPs get the money in time.
At a press conference in Rochdale, the Chancellor said: “We have listened to the concerns that people had about the level of the means test, and so we will be making changes to that. They will be in place so that pensioners are paid this coming winter.
“We’ll announce the detail of that and the level of that as soon as we possibly can. But people should be in no doubt that the means test will increase and more people will get a winter fuel payment this winter.”
The Tories accused her of “scrambling to salvage her failing economic plan”.
Shadow Treasury minister Gareth Davies said: “Rachel Reeves is scrambling to salvage her failing economic plan after the Prime Minister has made U-turn after U-turn, punching holes in her credibility.
“She needed to do better than copying and pasting announcements made by the previous Conservative government. The country is not falling for their lies any more. Britain deserves better.
“Only the Conservatives believe in sound money, low tax and the ingenuity of our entrepreneurs.”
The Chancellor’s remarks came as pensions minister Torsten Bell ruled out the prospect of returning to a universal winter fuel payment.
Speaking to the Work and Pensions Committee, Mr Bell said: “Directly on your question of is there any prospect of a universal winter fuel payment, the answer is no, the principle I think most people, 95% of people agree, that it’s not a good idea that we have a system paying a few hundreds of pounds to millionaires, and so we’re not going to be continuing with that.
“But we will be looking at making more pensioners eligible.”
Asked what excess deaths were predicted as a result of changes to the winter fuel payment last autumn, he added: “You don’t need to look at predictions, you can look at what happened in the data over last winter.
“First of all, we saw negative excess deaths, so fewer deaths than normal, that’s obviously due to a wide range of factors.
“But if we look at the cohorts particularly affected by changes in the winter fuel payments, we see no differential effects on their health outcomes over the course of last winter. That’s obviously partly because there’s lots of wider support.
“No one is saying, no one is asking people to wait for changes to the policy on winter fuel payment for help with energy bills.
“We’ve already been getting on with making sure we’re extending the household support fund, raising the state pension significantly above inflation, getting on with the longer-term answers in terms of a warm homes programme.
“Help is happening all over the Government’s policy agenda but in this particular area, we do want to help more pensioners in future.”
Rachel Reeves refuses to rule out tax hikes after announcing £15bn splurge
Chancellor Rachel Reeves announcing new funding for transport in the North and Midlands (Image: Getty)
Chancellor Rachel Reeves refused to rule out tax increases as she unveiled plans to spend billions of cash on transport schemes. Her comments will hike up concern that new tax rises may be coming in the autumn Budget.
The Chancellor was challenged to be “honest with the public” and admit she faces a stark choice of “really deep cuts” and “future tax rises”. Ms Reeves was asked whether she would bow to pressure within her own party to introduce new “wealth taxes” or consider pushing up council tax on bigger homes.
Last year the Chancellor shocked employers with the hike in their National Insurance Contributions and there was also fury at inheritance tax changes which will hit farming families. Ms Reeves was careful not to box-in her options when quizzed after her speech on funding for transport improvements.
She was put on the spot by Sky News’ Beth Rigby, who said: “Chancellor, in the past two weeks, voters have heard about big increases in defence spending, a reversal of cuts to the winter fuel allowance [and] potentially lifting the two-child benefit cap and they wonder how you are going to pay for all of these additional commitments. The Deputy Prime Minister, Angela Rayner, is pressing you for more wealth taxes, [Greater Manchester Mayor] Andy Burnham thinks that you should look again at council tax so that people with bigger homes potentially pay more.
“You’ve ruled out changing your fiscal rules, can you be honest with the public that you cannot rearm and do all the rest on welfare without either really deep cuts elsewhere or future tax rises. So, Angela and Andy have a point?”
Ms Reeves launched into a staunch defence of how the Government can spend more on the military.
She said: “The increase in defence spending that underpins the strategic defence review that was published earlier this week is funded by a commensurate reduction in the international aid budget. We took that down from 0.5% of GDP to 0.3% of GDP so we could lift defence spending from 2.3% of GDP to 2.5% of GDP so that is fully costed and fully funded.
“As we have been clear on winter fuel we will set out how we will fund that… We’ll set out how everything will be paid for in the Budget in the autumn. But it is important that we do is funded because that’s how people know that we can afford it.”
The Labour manifesto contained pledges not to raise income tax, National Insurance or VAT, and Ms Reeves described these commitments as “promises that we stand by”.
The Chancellor also stressed she did not expect the coming Budget to feature tax hikes on the scale of last year’s.
She said: “We made decisions in the Budget last year to increase taxes by £40billion. I have absolutely no intention of repeating a Budget on that scale again.
“That Budget was absolutely necessary because the previous Government left a £22billion black hole in the public finances.”
