Chancellor of the Exchequer Rachel Reeves said she was taking difficult decisions after a Treasury spending audit revealed £22 billion of unfunded pledges.
Ms Reeves confirmed that the Autumn Budget will take place on 30 October.
In a statement to Parliament, the Chancellor made a number of announcements but said there would be more to come on tax and spending plans at the Budget.
The Chancellor said that she has inherited a £22 billion hole in the public finances and said urgent work is required to reduce the pressure on finances by £5.5 billion this year and over £8 billion next year.
Ms Reeves announced that the government will cut Winter Fuel Payments to those not in receipt of pension credits or other benefits.
The Chancellor announced a number of immediate savings, including:
- £800 million this year and £1.4 billion next year from scrapping the Rwanda migration partnership and scrapping retrospection of the Illegal Migration Act.
- £70 million this year by cancelling the Investment Opportunity Fund and other small projects.
- £185 million next year from cancelling the Advanced British Standard.
- £785 million next year from stopping unaffordable road and railway schemes.
Ms Reeves also outlined the next steps in delivering tax commitments from Labour’s election manifesto.
This includes ending the VAT tax breaks for private schools from 1 January 2025 to help recruit 6,500 new teachers, as well as replacing the non-domicile regime with a new internationally competitive residence-based regime.
The Chancellor said:
‘This is not the statement I wanted to give today, and these are not the decisions I wanted to make. But they are the right decisions in difficult circumstances.’
Internet link: HM Treasury press release