Displaying items by tag: Rachel Reeves

Millions of pensioners will lose winter fuel payments after the Government won a Commons vote to end the universal benefit. Chancellor Rachel Reeves introduced the measure as part of an effort to address a £22 billion deficit in public finances. The payment , which had been given to all pensioners, will now be restricted to those receiving pension credit. The move, which will save around £1.5 billion annually, has drawn criticism for its sudden implementation without public consultation. 53 Labour MPs abstained from voting, and some people have vowed never to vote Labour again. One Labour MP, Jon Trickett, broke ranks and voted against the measure, citing concerns about pensioner poverty and criticising the Government for targeting the vulnerable rather than the wealthy. The winter fuel payment, introduced in 1997, was designed to help pensioners with heating costs, but its removal will affect ten million people, leaving many facing increased hardship this winter.

Rachel Reeves is preparing to implement a tough October budget that includes tax increases, spending cuts, and stricter benefit policies. Despite stronger-than-expected economic growth in early 2024, she faces a significant budget deficit, with government borrowing reaching £3.1 billion last month, more than double the amount from the previous year. Reeves had already announced initial cuts, including the scrapping of winter fuel payments for most pensioners and halting plans for social care reform. The upcoming budget is expected to raise more revenue from inheritance and capital gains taxes, maintain a 1% increase in public spending with cuts in some departments, and uphold the two-child benefit cap. Despite improved economic performance, the Treasury insists that the financial situation remains dire, with borrowing on track to exceed forecasts. Reeves argues that she inherited the worst public finances since World War II, and further tough decisions are necessary to address the substantial 'black hole' in the budget.