What Is Chancellor Rachel Reeves Cutting To Deal With The "Black Hole" She Inherited?
Rachel Reeves addressing the House of Commons today (Alamy)
3 min read
Winter fuel allowance payments will become means tested and hospital and transport projects scaled back, as Rachel Reeves laid out her plans to tackle a "£22billion hole in the public finances".
Reeves repeated the mantra “if we cannot afford it, we cannot do it” several times during her House of Commons speech on Monday afternoon.
In her speech, the Chancellor said billions of pounds of undisclosed spending by the last government had forced her into "difficult" decisions.
Here are some details on the projects and schemes that are set to be scaled back by the Chancellor in an attempt to balance the books:
40 new hospitals put on hold and social care reforms gone
In 2020, the Conservative government led by Boris Johnson announced plans for 40 new hospitals to be built by 2030, but this will now be subject to a “complete review” Reeves said, after constituents were given “false hope” about the projects.
She told the Commons that the National Audit Office believed the plans for delivery of the promise were “wildly off track” and since she became Chancellor, it had “become clear that the previous government continued to maintain its commitment to 40 hospitals without anywhere close to the funding required to deliver them".
The Chancellor also confirmed that it will “not be possible” for the Government to take forward reforms to adult social care charges.
She said that the last government had “delayed” the changes when “local authorities were not ready and their promises were not funded”. The move will save over £1 billion by the end of next year, Reeves claimed.
Rishi Sunak’s plan to scrap A-Levels ditched
Last year, the then-government led by Rishi Sunak announced plans for a new qualification, the Advanced British Standard, which an official release said would “bring together the best of A Levels and T Levels into a single qualiication framework”.
Reeves today told MPs that this plan was “supposed to be the former prime minister’s legacy, but it turns out he did not put aside a single penny to pay for it.”
She said that the new government will “not go ahead with that policy”.
Winter Fuel Allowance payments will be means tested
Reeves said that she was making the “difficult decision” to change the way that the Winter Fuel allowance is allocated, so that pensioners do not receive pension credit or other means tested benefits will not receive the payment from this year onwards.
She said that the Government “will continue” to provide fuel payments worth £200 for households who receive pension credit, and £300 for those who receive pension credit with someone over the age of 80.
She told the Commons: “Let me be clear, this is not a decision I wanted to make, nor is it the one that I expected to make, but these are necessary and urgent decisions that I must make.”
Transport projects trimmed
Reeves told the Commons that her spending audit uncovered “£1billion of unfunded transport projects” and there will now be a series of cancellations and reviews.
The Restoring Your Railway project — first announced under Johnson and designed to bring older and disused railways back into use — will be cancelled, Reeves confirmed.
The change will save £85m next year, the Chancellor said, and individual jobs will instead be subject to a review by Transport Secretary Louise Haigh.
Reeves said that Haigh had also agreed to “not move forwards with projects that the previous government refused to publicly cancel” despite knowing that they were “unaffordable” including proposed work on the A303 and the A27.
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