Main points as Labour announce billions of spending cuts

The Chancellor said her aim was to “expose the scale of what has been uncovered” after Labour came to power, pointing to a £22 billion black hole left by the previous government.

She then set out Labour’s “immediate action” to deal with it, including cancellation and delays of major infrastructure projects and scrapping Winter Fuel Payments for millions of pensioners across the UK.

READ MORE: An economist reacts to Rachel Reeves speech: 'Utterly unjustifiable'

Here is a quick look at the headline announcements, reaction and takeaways from Reeves’ speech in the House of Commons.

• £22 billion spending black hole

Reeves told the Commons Labour had inherited “a projected overspend of £22bn ” beyond what the previous government had planned for, which she said the Tories had “covered up”.

She said the Government would aim to recoup £5.5bn this year, and £8bn next year.

• New era of austerity?

Stephen Flynn (below) said the announcement marked a “new era of austerity”.

“Labour chose to adopt Tory fiscal rules, and this is the consequence,” he wrote on Twitter/X.

(Image: Jonathan Hordle/ITV)

The SNP’s Westminster leader also said Labour had “misled voters’ after promising no cuts during during the General Election campaign.

• Opposition reject Labour just “discovered” overpayments

Opposition parties rejected the idea that Labour has only just discovered or “uncovered” the £22bn black hole.

Among them was SNP MP Seamus Logan, who called on the Chancellor to “apologise” to Scots.

Logan said: “During the recent election campaign, we in the SNP repeatedly warned about an £18bn hole in the Labour Party’s spending plans.

“Now that you’ve confirmed that today, Chancellor, will you apologise to those voters in Scotland who supported the Labour Party leader in Scotland when he said ‘read my lips – no austerity’?"

Responding, Reeves said: “The £22bn black hole is this year. The Institute of Fiscal Studies was warning about a black hole over the lifetime of the parliament of £18bn.

“Those are two very different things, and both of them can be true.”

• Winter Fuel Payments scrapped

Reeves announced that the Government will be ending Winter Fuel Payments for those not in receipt of benefits.

Removing the payment for millions of pensioners will save £1.5bn per year, she said.

People born before 25 September 1957 were previously able to get between £100 and £300 to help pay heating bills.

Now, only those households with someone aged over state pension age who get one of Pension Credit, Universal Credit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance will continue to receive Winter Fuel Payments.

(Image: PA)

This led to widespread condemnation, including from consumer expert Martin Lewis (above).

To note: The Scottish Government is already preparing to replace this payment, The National understands, and have been approached for further comment.

• Ukraine

There is “not enough money set aside for the reserve” to fund costs associated with Ukraine, the Chancellor said.

But Reeves said the Government “will continue to honour these commitments in full and, unlike the previous government, we will make sure that they are always fully funded”.

• Budget date set

October 30 will be the date of the new Government’s first budget, the Chancellor said.

She added it will involve taking “difficult decisions” to meet Labour’s fiscal rules, and said this would include decisions on spending and tax.

Reeves did however rule out raising income tax, national insurance or VAT, as per the Labour manifesto.

• Office of Value for Money

The Government will set up a new watchdog aimed at ensuring all Government spending provides value for money, the Chancellor said.

She also confirmed to the Commons that a Covid anti-corruption probe would go ahead, aimed at clawing back money from Covid fraud.