The Chancellor of the Exchequer, Rachel Reeves, has delivered a statement outlining billions worth of cuts to public spending. In her statement, the Chancellor said that the new Labour Government’s economic inheritance was poor and blamed the Conservatives for the £22 billion black hole in public finances that now needed to be plugged.
In the speech, Ms Reeves confirmed significant cuts to infrastructure projects and scrapped the social care cap. The winter fuel allowance for pensioners will also be stripped back. Under the plans, only pensioners on the lowest incomes and universal credit will receive the allowance. Abolishing the cap on social care is expected to save £1 billion per year. Of note is her decision to pause the New Hospital Programme – potentially ending the plan to build forty new hospitals.
Ms Reeves announced the Budget date of 30 October, noting that it will “involve taking difficult decisions to meet our fiscal rules across spending, welfare and tax.” Tax rises are highly likely in the autumn. Government Departments will also be expected to cut back on consultancy costs, reduce back office staff and find efficiency savings.
