Winter fuel payment, pension credit and NHS: How the Rachel Reeves announcements affect you

The Chancellor announced a series of spending cuts as she blames the Tories for leaving a £22bn black hole in the public finances

Pensioners benefits will be cut, transport projects will be cancelled and plans for new hospitals are at risk, Rachel Reeves has revealed.

The Chancellor has set out a series of spending cuts, accusing the Conservatives of 'covering up' a £22bn black hole in the public finances. It includes a 'complete review' of a major NHS scheme which includes the rebuild of North Manchester General Hospital.

Ms Reeves also announced changes to winter fuel payments which is set to affect millions of pensioners. She also revealed that some transport schemes, including the restoration of some previously closed railway lines promised by the Conservatives, will be cancelled.

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Ms Reeves also confirmed an above-inflation pay rise for public sector workers worth up to 5.5 per cent. It comes as the government agrees a pay deal with junior doctors thought to be worth around 20 per cent over two years in a bid to end long-running strikes.

The Conservatives' Shadow Chancellor Jeremy Hunt has accused the new Labour government of 'caving in' to trade unions, claiming that the pay rises account for half of the 'black hole' revealed by Ms Reeves. But the new Chancellor accused the last government of making unfunded promises which they did not budget for, telling MPs in the House of Commons today (July 29), "I will never do that."

Setting out how the government plans to plug the £22bn shortfall in this year's budget, Ms Reeves announced a number of savings, repeating, "If we cannot afford it, we cannot do it." However, Mr Hunt accused her of 'laying the ground for tax rises' later this year.

The Chancellor confirmed that the autumn Budget will be on October 30, warning that it will involve making 'difficult decisions on welfare, spending and tax'. There will also be a review of government departments budgets as bosses are asked to make savings.

Winter Fuel Payment and Pension Credits

Ms Reeves said she was taking the 'difficult decision' that those not in receipt of pension credit, or other means-tested benefits, would no longer receive the winter fuel payment from this year onwards. Those on pensions credit will still get payments, she explained.

The government will continue to provide winter fuel payments worth £200 to households receiving pension credit, or £300 to households receiving pension credit with someone over the age of 80. The move is set to affect millions of pensioners in the UK.

She said: "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 the necessary and urgent decisions that I must make. It is the responsible thing to do to fix the foundations of our economy and bring back economic stability."

The Chancellor also said that the government will maximise the take-up of pension credits. This includes by working with older people's charities and local authorities to raise awareness of pension credit and help identify households who are not claiming it.

North Manchester General Hospital

The Chancellor announced 'a complete review' of plans to build 40 new hospitals first unveiled by former Conservative Prime Minister Boris Johnson. The programme includes a multi-million pound project to rebuild the crumbling North Manchester General Hospital.

Ms Reeves said that 'only one new project' has opened to patients since the pledge was made by Mr Johnson and construction has started at just 'six' more locations. She said the review would culminate in a 'thorough, realistic and costed timetable for delivery'.

The Chancellor did not name any hospitals or projects in her speech on what the Labour government has inherited from the Tories. The new health secretary, Wes Streeting, told the Manchester Evening News in June, before the general election, that Labour is committed to the project, but said 'full and frank' conversations were needed to make sure the completion target date of 2030 is met.

Public sector pay rises

The Chancellor said she would be 'accepting in full' the recommendations of the public sector pay bodies to give workers pay rises, and said this would be in the 'best interests of our economy too'. Among the pay offers was a deal agreed with junior doctors which will see them get a 20 per cent pay rise over two years in a bid to resolve their long-running pay dispute with the government.

Teachers and nurses are set to receive a 5.5 per cent pay boost, armed forces personnel will get a 6 per cent increase, prison service workers 5 per cent and the police 4.75 per cent. The TUC union said the Chancellor was 'right' to accept the recommendations in full.

Civil servants will also get a pay boost of up to 5 per cent. Government departments will have to find savings of at least £3bn to help fund the pay rises, which will cost £9bn this year with all non-essential spending on consultancy and communication to be stopped.

Roads and railways

The Restoring Your Railway Fund will be scrapped, the Chancellor said, amid '£1bn of unfunded transport projects' revealed by her audit of spending. Bids for cash to restore railways in Bury, Bolton and Rochdale have previously been made as part of this scheme.

However, the government pulled its support for the Bury to Rochdale line last year. At the time, one MP called it a 'kick in the teeth'.

The Chancellor also announced that several major road upgrade programmes would not go ahead, including the proposed work on the A303 and the A27. This means that the controversial road tunnel planned beneath Stonehenge in Wiltshere will not go ahead.