Rachel Reeves Scales Back Universal Winter Fuel Payments To Plug "Black Hole" In Public Finances

Rachel Reeves has accused the Conservatives of leaving a £22bn “black hole” in the public finances that the Labour government will have to repair through “difficult" decisions like binning unfinished projects and restricting the winter fuel allowance.

In a House of Commons statement on Monday afternoon, the Chancellor said she would set out the “scale and seriousness” of the fiscal inheritance left by the previous Tory government, with the Treasury producing a fresh review of public finances.

She also announced the Autumn Budget will take place on 30 October, alongside an economic and fiscal forecast from the Office for Budget Responsibility (OBR) and a multi-year spending review that will look ahead to the years 2025 and 2026. 

The previous government led by Rishi Sunak published its plans for day to day spending in the Spring Budget in March. However, Reeves said she was told on her first day in the Treasury a few weeks ago that the published numbers were not “even close” to what Sunak and the then-chancellor Jeremy Hunt actually expected to spend.

“We have inherited a projected overspend of £22bn, a £22bn hole in the public finances now, not in the future, but now, £22bn of spending this year that was covered up by the party opposite.

“If left unaddressed, it would mean a 25 per cent increase in the budget deficit this year.”

The Chancellor listed examples of specific budgets which were overspent, including on the asylum system and the Rwanda deportation plan, failing to budget for handing out cash to rail companies to make up for passenger shortfall, and not setting enough money aside to pay for support to Ukraine.

Reeves said the previous government overspent on the asylum budget by £6.4bn, and on the transport budget by