Summary
Chancellor Rachel Reeves says winter fuel payments will now be restricted to those on pension credits or other means-tested benefits
She says the Labour government has inherited a projected overspend of £22bn from the Conservatives
The projected overspend on the asylum system, including the Rwanda plan that Labour has now scrapped, was more than £6.4bn for this year alone, she says
She has also cancelled some road and rail projects - including the tunnel under Stonehenge
Reeves also confirmed the government has made a 22% two-year pay offer to junior doctors. Teachers and NHS workers will also get a 5.5% rise
Shadow chancellor Jeremy Hunt says Reeves is "shameless" in paving the way for tax rises - and October's Budget will be a "biggest betrayal in history by a new chancellor"
Live Reporting
Edited by Francesca Gillett and Sean Seddon
Winter fuel payment cut 'a social injustice' - Age UKpublished at 17:10 29 July
17:10 29 July
Image source, PA MediaThe charity Age UK says they "strongly oppose" the chancellor's decision to restrict how many pensioners can claim the winter fuel payment.
They say that more than one inthree pensioners entitled to pension credit don't receive it and that around a million older people have weekly incomes less than £50 above the poverty line.
"Withwinter now just over the horizon, the government should halt their proposedchange and think again," says charity director Caroline Abrahams.
What is the winter fuel payment?published at 17:01 29 July
17:01 29 July
Image source, PA MediaThe winter fuel payment is a benefit paid to pensioners, designed to help them afford the higher energy bills that come with keeping a home warm during the winter.
How much is it? The benefit is between £100 and £300, depending on the age of the recipient and whether or not they live alone.
Who gets it? More than 11.3 million pensioners received the payment in winter 2022-23.
The changes announced by Reeves today tightens the requirements to be eligible for the payment.
Now those who are not in receipt of pension credit or other means-tested benefits will no longer receive the payment.
Pension credit is a benefit paid to people on low incomes who are above state pension age.
Labour to establish Covid anti-corruption probepublished at 16:51 29 July
16:51 29 July
During her statement we heard Reeves confirm she is appointing a Covid corruption commissioner tasked with clawing back money from pandemic-era contract fraud.
Last year, she told the Labour Party conference there is at least £2.6bn of "lost" public funds to recover.
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VAT on private school fees to kick in on 1 Januarypublished at 16:41 29 July
16:41 29 JulyBreaking
Branwen Jeffreys
Education editorVAT at the standard rate of 20% will be added toprivate school fees from 1 January 2025, according to details justpublished by the Treasury.
Any fees paid from today for the term in the new year willbe subject to the additional tax, removing the possibility of parents paying inadvance to bring costs down.
Where a child is funded to be in an independent schoolbecause their needs can not be met in the state sector, the local authoritywill have those costs refunded.
The government says it will also legislate to remove thebusiness rates charitable rates relief.
Labour pledged to apply VAT to public school fees during the election campaign but we did not know the date it would start from until now.
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Lib Dems respond to Reeves statementpublished at 16:38 29 July
16:38 29 July
We've also just heard from Liberal Democrat Treasury spokesperson Sarah Olney.
She refers to years of Tory chaos and mismanagement which have left the economy on "life support".
She calls for "urgent" investment in GP, dentists and hospitals, as well as improvements in efficiencies within the NHS to help people off waiting lists and back into work .
Olney also wants a long-term industrial strategy and cross-party talks on social care.
She "urges" the Labour government to draw on Lib Dem ideas around raising funds - including asking the largest companies to "pay their fair share".
Pay rise for teachers should head off any strike threatspublished at 16:31 29 July
16:31 29 July
Branwen Jeffreys
Education editorReeves mentioned an above-inflation pay rise for teachers in England, which the BBC understands will be 5.5%, backed by anadditional £1.2bn in funding.
That makes any industrial action highly unlikely. The general secretary of the National Education Union says it is a “welcome step in the right direction” adding that “strikesthis year are unlikely”.
Many schools in England had already budgeted for pay increases of around3% from September. The £1.2bn being promised by the government isintended to top up to the 5.5% mark.
Teachers' pay has fallen in value once cost of living increases are takeninto account.
Since 2010 the independent Institute for Fiscal Studies says experiencedteachers have seen a real terms reduction of 11%. On average forall teachers pay is 6% lower in real terms over the same time, and no higher invalue than in 2001.
The offer will now be formally considered by the education unions.
Watch: Reeves attacks Tories over economic legacypublished at 16:28 29 July
16:28 29 July
Hunt ends statement by accusing Labour of 'betrayal'published at 16:28 29 July
16:28 29 July
Hunt ends his response by telling the Commons: "Taxes will have to go up, and she chose not to tell us."
He claims Labour has announced spending commitments worth £24bn since taking power on things like energy, its National Wealth Fund and on public sector pay.
"She's leaving tax payers to pick up the tab," he says.
Hunt calls this Reeves' "first major misstep" as chancellor and says Labour's first Budget will be the "biggest betrayal in history by a new chancellor".
Public sector pay rises confirmed - here's what they arepublished at 16:25 29 July
16:25 29 JulyBreaking
Faisal Islam
Economics editorWe've just got more detail on pay rises for public sector workers.
- NHS workers and teachers will get a 5.5% pay rise
- Armed forces personnel will get a 6% increase
- Prison service worker will see a rise of 5%
- The police will get a pay increase of 4.75%
In total it will cost £9.4bn. Two thirds of this will be funded by central government, while the rest will be found from within departments fromsavings.
Hunt denies government knew about public sector pay offerspublished at 16:22 29 July
16:22 29 July
Jeremy Hunt says the so-called "black hole" in finances comes from "discretionary public sector pay awards".
He asks her to confirm that aside from the recommendation for a teacher pay rise, none of the other public sector recommendations were seen by the former Tory government - coming in instead after the election was called.
Hunt further quizzes her on asking for "productivity enhancements" to help meet the awards and once more asks for confirmation that one of the reasons for the funding gap is her choice to backdate the 22% pay award for junior doctors.
Winter fuel payment will now be means testedpublished at 16:18 29 July
16:18 29 July
Faisal Islam
Economics editorAround 10 million pensioners and seven million pensioner households will lose their winter fuel payment aspart of an immediate cut aimed at raising £1.4bn.
She say it will help fill what the chancellor calls a “black hole” inherited from previous governments.
The £300 winter fuel payment - created by Labour Chancellor Gordon Brown in 1997 - will now be means tested.
Hunt references BBC Verify take on old Reeves claimpublished at 16:17 29 July
16:17 29 July
In his response to Reeves's address, Hunt references a BBC Verify article that put her claims about inheriting the worst set of economic circ*mstances since World War Two to an expert.
In March, Verify spoke to Ethan Ilzetzki, from the London School of Economics, who described the current level of debt as being "high but nowhere close to where it was in the 1950s".
On the overall claim about the worst conditions since World War Two, he said: "I struggle to find a metric that would make that statement correct".
You can read that article here.
Hunt casts doubt on Labour's Treasury auditpublished at 16:15 29 July
16:15 29 July
Hunt further questions Reeves's figures, saying that four days ago she presented the Commons with estimates on its spending plans for the year.
He says that these estimates were signed off by the most senior civil servants.
"Yet four days on the chancellor is saying that those estimates are wrong," says Hunt.
He asks whether "politically neutral" civil servants or a "political chancellor" should be trusted.
Hunt says that Reeves knows the estimates are right and today's figures are "spurious".
Reeves looks to change way future governments workpublished at 16:13 29 July
16:13 29 July
Simon Jack
Business editorThe chancellor has imposed new restraints and requirements on future governments in her statement today.
She has announced a duty for the Treasury to share detailed departmental spending plans with the OBR and for spending reviews to have at least a two-year time horizon.
That's a big change to the way ministers will work in the future.
Hunt accuses Reeves of 'shameless' tacticspublished at 16:10 29 July
16:10 29 July
To shadow chancellor Jeremy Hunt now, who is responding to Reeves' statement.
He says: "The chancellor will fool absolutely no one with a shameless attempt to lay the ground for tax rises she didn't have the courage to tell us about."
Hunt tells the Commons that Reeves held detailed talks with Treasury officials before the election.
Scrapping winter fuel payments for some pensioners is big callpublished at 16:08 29 July
16:08 29 July
Helen Catt
Political correspondentScrapping the winter fuel payment for pensioners who don’t receive benefits is the sort of thing that a government only really has the political capital to do at the very start of its term.
No wonder Rachel Reeves is also trying to tie her decision to do it to the Tories.
It was certainly a surprise and it is also the sort of move that a Conservative government would almost certainly not have done, given the age profile of its core voters.
Chancellor finishes speakingpublished at 16:06 29 July
16:06 29 July
Reeves pledges to restore the country's economic stability, make "tough choices" and "fix the foundations of the economy".
She wants to rebuild Britain and make "every part" of the country better off.
Now we're hearing from shadow chancellor Jeremy Hunt.
Tories leave 'unforgivable' legacy on economypublished at 16:05 29 July
16:05 29 July
Reeves calls the Conservative's economic legacy "unforgivable" and accuses them of giving "false hope" to Britain.
They promised roads that would never be built, public transport that would never arrive and hospitals that would never treat a single patient, she says.
"They spent like there was no tomorrow because they knew someone else would pick up the bill," she declares.
The worst part, she adds, is that the Tories campaigned on a platform to do it all over again.
Economic growth is Labour's main goal, says chancellorpublished at 16:04 29 July
16:04 29 July
The Budget and spending review will set out how Labour will achieve its "number one priority - growing the economy", says Reeves.
The government will use the spending review to prioritise capital investment to leverage more private investment into the country.
"It won't happen overnight," she says. "It will take time and it will take focus."
Reeves repeats pledge not to raise working taxespublished at 16:02 29 July
16:02 29 July
Reeves reiterates her pledge not to raise taxes for working people - that is National Insurance, basic higher or additional rates of income tax and VAT - but says there will be challenging trade-offs.
She announces a multi-year spending review that will set the budgets for government departments for at least three years and provide "long term certainty".
Reeves says she will be looking closely at the welfare system as part of that process.
