Winter fuel payments to be restricted as Reeves says there is £22bn spending shortfall – UK politics live | Politics

In the Commons Sarah Olney, the Liberal Democrat Treasury spokesperson, focused mainly on criticising the last Tory government in her response to Rachel Reeves. She said:

The outgoing Conservative government will go down in the history books as one of the most damaging administrations our country has seen and today’s statement has thrown that picture into even more stark relief.

It wasn’t just their catastrophic mini budget, we saw a vicious cycle of stagnation and recession driven by years of chaos and uncertainty.

Over the last parliament we saw the Conservative Party raise taxes on hardworking households again and again just to pay for its own mistakes.

But Pete Wishart, the SNP’s deputy leader at Westminster, told MPs that cutting winter fuel payments felt like Tory austerity. He said:

Everybody and their granny knew that there would be a multibillion pound black hole, only the chancellor seemed to be deaf and blind to the situation, but we knew she was going to be here explaining the sheer scale of it.”

Isn’t it the case that cutting winter fuel payments to all pensioners seems and feels like Tory austerity? And what discussions has she had with the Scottish government? Because she will know obviously that this is a devolved responsibility.

Teachers in England will get a pay rise of 5.5%, Bridget Phillipson, the education secretary, has said. In a written statement Phillipson said:

I am today announcing that we are accepting in full the independent School Teachers’ Review Body’s (STRB) recommendations for 2024/25, implementing a substantial pay award for school teachers and leaders of 5.5% from September. This award will apply to maintained schools across all pay points and allowances, and in practice, will also be implemented in many academies at their discretion. I want to thank the STRB members for their careful consideration of the evidence presented to them.

And police officers in England and Wales will get a pay rise of 4.75%, Yvette Cooper, the home secretary, has announced. In a written statement she says:

Both the PRRB [Police Renumeration Review Body] and SSRB [Senior Salaries Review Body] recommended a consolidated increase of 4.75% to all police officer ranks and pay points with effect from 1 September 2024. The government is accepting the recommendation in full. The Home Office will provide £175m additional funding in 2024-25 to forces to help with the cost of the pay increase.

While the recommendation for a consolidated award of 4.75% is significantly above what had been budgeted for in the 2021 spending review, it is right that we accept it in full. Police officers have a crucial role to play in delivering the government’s manifesto commitments to make Britain’s streets safe and increase public visibility through neighbourhood policing.

The main pay award for members of the armed forces is worth 6%, the Ministry of Defence has said, although new recruits will get more. In a written ministerial statement John Healey, the defence secretary, says:

Along with various forms of support, accommodation, and pensions, pay plays a vital role in rewarding our people for the work they do. To recognise the commitment and service of our armed forces personnel, we are announcing today that we will be accepting in full the 2024 Pay Award recommendations made by the independent Armed Forces’ Pay Review Body (AFPRB) and Senior Salaries Review Body (SSRB). This year’s award provides a targeted and significant pay uplift for new recruits alongside a large headline increase of 6%.

Prison officers will get a pay rise worth 5% for 2024-25, Shabana Mahmood, the justice secretary, has said in a written statement to MPs. She says:

All Prison Service staff play a vital role in helping to rehabilitate prisoners and keep the public safe. I am grateful for their hard work and dedication. Acceptance of these recommendations reflects our priorities in ensuring the recruitment and retention of Prison Service staff to deliver this essential frontline service and recognises the valuable service they deliver every day.

The award will deliver a pay rise of at least a 5% base pay increase for all prison staff between Operational Support Grade and Governors (Bands 2-11), with a targeted focus on the lowest paid.

And judges will get 6%, she says. Explaining the difference, she says:

The SSRB [Senior Salaries Review Body] recommended a pay award of 6% for all judicial office holders within the remit group for 2024/25. I have decided to accept this recommendation in full, which will be applied equally to all judicial office holders for whom I have responsibility and will be backdated to April 2024.

I recognise the SSRB’s concerns regarding persistent recruitment and retention issues affecting parts of the judiciary. I look forward to working alongside the judiciary to understand how we can start to address these shortfalls through system-wide reforms going forwards.

The Office for Budget Responsibility seems to be backing up Rachel Reeves’ claim that the last government was not open about the cost of the measures it was committed to. Richard Hughes, the OBR’s chair, has announced that he has set up an inquiry into the accuracy of the figures the OBR was given.

In a letter to the Treasury committee explaining the move, Hughes says:

In my testimony before the Treasury committee and other parliamentary committees, I have expressed my concerns about the transparency and credibility of the existing arrangements within government for forecasting, planning, and controlling the 40 per cent of public expenditure within DEL [departmental expenditure limit]. In our semi-annual EFO [economic and fiscal outlook] reports (including the March 2024 EFO) and in our August 2023 working paper on the OBR’s forecast performance, the OBR has highlighted potential overspending against the DEL plans set by the Treasury as one of the most significant risks to the fiscal outlook.

The document published today by HM Treasury entitled Fixing the foundations: Public spending audit 2024-25 identifies £21.9 billion in net pressures on the DEL budgets set by the Treasury for the current financial year 2024-25. We were made aware of the extent of these pressures at a meeting with the Treasury last week. The Treasury document also sets out its plans for further managing down these pressures over the remainder of the financial year. If a significant fraction of these pressures is ultimately accommodated through higher DEL spending in 2024-25, this would constitute one of the largest year-ahead overspends against DEL forecasts outside of the pandemic years.

Given the seriousness of this issue, I have initiated a review into the preparation of the DEL forecast in the March 2024 EFO. The review will assess the adequacy of the information and assurances provided to the OBR by the Treasury regarding departmental spending and report to Baroness Sarah Hogg, chair of the OBR’s Oversight Board, and Dame Susan Rice, chair of the OBR’s Risk Committee.

This is drafted in OBR jargon, but the message is a strong one; Hughes is suggesting the OBR was mislead by the Treasury about the true cost of the Tories’ spending plans.

Hughes has expressed his concerns about the accuracy of Treasury future spending figures in the past. In January he told the Treasury committee they were worse than a work of fiction because “someone’s bothered to write a work of fiction, whereas the government hasn’t even bothered to write down what its departmental spending plans are underpinning the plans for public services”.

In the Commons a few minutes ago Rachel Reeves said this letter was “incredibly serious”. In response to a question from Labour’s Mark Ferguson, Reeves said the letter “can leave no one in this chamber under any doubt about the seriousness of the situation”.