RACHEL REEVES: We will deliver security for working people and renewal for Britain

BRITAIN’S POOREST COMMUNITIES FACE MORE HARDSHIP

  • Chancellor vows to bring about “security and national renewal” as she delivers a Spring Statement to kickstart economic growth, protect working people and keep our country safe.  
  • Reeves will warn that “we have to move quickly in a changing world”, unveiling a significant step towards spending 2.5% of GDP on defence with £2.2 billion funding boost next year.  
  • Growth and national security at heart of Plan for Change as funding invested in cutting-edge weapons and better homes for thousands of military families – paid for by reductions to international aid budget and from the Treasury reserve.  

The Chancellor will promise to deliver “security for working people” and a “decade of national renewal”, as she reveals how the Government will put advanced weaponry in the hands of British troops, provide better homes for military families and kickstart economic growth through the Plan for Change.   

At today’s Spring Statement, the Chancellor will announce a further £2.2 billion funding increase for defence from April, as she warns that Britain has to “move quickly in a changing world”. 

The funding will be invested in advanced technologies so that Britain’s armed forces have the tools they need to compete and win in modern warfare. This includes guaranteeing the investment to fit Royal Navy ships with Directed Energy Weapons by 2027. These weapons can hit a £1 coin from 1km away and take down drones at a distance of 5km.  

It will also be used to provide better homes for military families by refurbishing the defence estate – including over 36,000 homes recently brought back into public ownership from the rental sector. In addition to this, the funding will unlock rapid preparatory work, such as site surveys, planning and architecture, for the major redevelopment of Armed Forces housing through the Defence Housing Strategy.   

The investment will also help fund upgrades to infrastructure at His Majesty’s Naval Base Portsmouth, securing its ability to support Royal Navy operations into the future.   

Speaking in the House of Commons today, Chancellor of the Exchequer Rachel Reeves is expected to say: “This government was elected to change our country.

“To provide security for working people. And deliver a decade of national renewal. 

“That work of change began in July – and I am proud of what we have delivered in just nine months. 

“Restoring stability to our public finances; giving the Bank of England the foundation to cut interest rates three times since the General Election; rebuilding our public services with record investment in our NHS and bringing down waiting lists for 5 months in a row; and increasing the National Living Wage to give 3 million people a pay rise from next week. 

She will add: Now our task is to secure Britain’s future in a world that is changing before our eyes. The job of a responsible government is not simply to watch this change. 

“This moment demands an active government stepping up to secure Britain’s future. A government on the side of working people. 

“To grasp the opportunities that we now have and help Britain reach its full potential, we need to go further and faster to kickstart growth, protect national security and make people better off through our Plan for Change. 

She will also say: “In February, the Prime Minister set out the government’s commitment to increase spending on defence to 2.5% of GDP from April 2027 and an ambition to spend 3% of GDP on defence in the next parliament as economic and fiscal conditions allow.

“That was the right decision in a more insecure world, putting an extra £6.4bn into the defence budget by 2027. But we have to move quickly in a changing word. And that starts with investment. 

“So I can today confirm that I will provide an additional £2.2bn for the Ministry of Defence next year – a further downpayment on our plans to deliver 2.5% of GDP. 

“This increase in investment is not just about increasing our national security but increasing our economic security, too. As defence spending rises, I want the whole country to feel the benefits.” 

The plan will include action to harness the ingenuity of Britain’s leading manufacturing and technology sectors, creating jobs across the country and putting more money into people’s pockets.   

The increase set to be announced today follows the extra £2.9 billion announced for defence in the Autumn Budget and takes spending as a proportion of GDP to 2.36 per cent in 2025/26 – up from 2.3 per cent in 2024/25.   

The announcement is fully funded. The new money comes from in-year funding from the Treasury reserve and from changes to the Overseas Development Assistance budget, so will not require additional borrowing and will maintain the Chancellor’s ironclad fiscal rule. 

Further detail on the Ministry of Defence’s investment plan will be set out via the Strategic Defence Review in the Spring and the Spending Review in June.   

Commenting on the increase in defence spending, Defence Secretary John Healey said: “National security is the bedrock of a successful economy and our Plan for Change. This significant increase in defence spending, on top of the £2.9bn announced by the Chancellor at the Budget, means an extra £5 billion for our Armed Forces next financial year. 

“This investment will make Britain stronger and safer in a more insecure world. And it will ensure defence is an engine for growth, creating good jobs across the nation. 
 
“These are the bold first steps of the largest sustained increase in defence spending since the Cold War announced by the Prime Minister last month. Our government is delivering for defence and investing in the outstanding men and women who keep Britain secure at home and strong abroad.” 

Scots say: Increase taxes on the richest, rather than make cuts to public spending

CHANCELLOR EXPECTED TO SLASH WELFARE IN SPRING STATEMENT

New polling reveals people in Scotland would overwhelmingly prefer the very richest to pay more in tax rather than see cuts to public spending, as parallel Oxfam analysis shows the UK’s wealthiest people continue to amass even greater fortunes.

It comes as new number crunching by Oxfam, Patriotic Millionaires UK and Tax Justice UK finds that UK billionaires have seen their fortunes swell by £11 billion in the past 12 months alone – the combined amount the UK Government plans to cut from international aid and social security entitlements for people in the UK with disabilities or illnesses.

Campaigners say the data shows the UK Government’s recent cuts are not about financial scarcity, but rather about political priorities, and they sharply contrast with public opinion.

The polling, carried out ahead of the Spring Statement by YouGov on behalf of Oxfam, shows that people aged over 16 in Scotland strongly back action to fairly tax the wealthiest:

  • 68% think the very richest should pay more in tax.
  • More than three-quarters (79%) would rather tax the very richest than see cuts to public spending.
  • 79% support a new 2% wealth tax on assets worth more than £10 million.

The findings pile further pressure on the UK Government to introduce wealth taxes on the richest millionaires and billionaires.

Tax justice campaigners have identified a series of fair tax reforms and loopholes that could be closed to raise additional revenue. They say that a 2% wealth tax alone, applied to assets worth more than £10m, could raise up to £24 billion annually or around £460 million a week while only impacting 0.04% of the population – around 20,000 people.

For illustrative purposes, if the 2% wealth tax on assets over £10 million was introduced now, UK billionaires would still have seen their personal wealth soar by an average of £141 million each – a total of nearly £7.5 billion combined – since this time last year.

The money raised could be used to reduce poverty and inequalities, strengthen public services, including the critical care sector, and boost climate action, instead of padding the pockets of the super-rich while deepening economic, gender and racial inequalities.

Jamie Livingstone, Head of Oxfam Scotland, said: “We all feel it in our bones: it’s indefensible that public spending to support those in poverty and crisis is being slashed, while private wealth is quietly stashed away.

“People in Scotland are crystal clear: they’d rather tax the richest than see cuts to public spending. Yet the UK Government has chosen to snatch £11 billion from the pockets of those who need it most while the same amount has been added to the bloated bank balances of those who need it least in just 12 months.

“It’s time for the UK Government to put fairness first; tax the super-rich and protect people in poverty. The choice is that simple.”

Mark Campbell, entrepreneur and member of Patriotic Millionaires UK, said: “As a millionaire I know the economy is working for a few people like me and working against the vast majority.

“Spending cuts are short-sighted and will only increase the worries of millions of people in the UK who are struggling to put food on the table and heat their homes.

“Meanwhile, the very richest people in our society are watching their wealth grow exponentially. It seems outrageous that the wealth of the richest is taxed at a much lower rate than the income of working people who will bear the brunt of these budget cuts.

A wealth tax is a very clear alternative. Given that most people want higher taxes on the very richest, and plenty of millionaires – people like me – also want it, what’s stopping the UK Government?”

As part of Tax Justice Scotland, a campaign backed by more than 50 diverse civil society organisations, think tanks, trade unions and academics, Oxfam Scotland is urging the UK and Scottish Governments to use their respective tax powers to fairly raise more money to enable greater investment in key poverty-reducing public services, like care, while combatting inequalities, and rewarding businesses that provide fair and flexible work – including for parents, and particularly women – while paying the real Living Wage.

Oxfam Scotland says the Scottish Government must also use devolved powers to help combat the growing gap between the wealthiest and those struggling to make ends meet, with the richest 10% having 217 times more wealth than the least wealthy 10%, and with record high income inequality.

Wealth inequality is not only deeply unfair, but a barrier to reducing poverty. It exacerbates social and environmental harms, fuels wider inequalities – such as those related to gender and race, and drives a wedge between those with wealth and those without it.

Campaigners are calling on Scottish Ministers to use the devolved tax tools at their disposal, such as landing a fair tax on pollution-spewing private jets using Scotland’s airports and finally replacing the discredited Council Tax with a system to tax property wealth fairly.

Jamie Livingstone added: “Scotland’s political leaders can’t afford to wait for Westminster to make the fair and obvious choice to make the wealthiest pay their share.

“As we approach the 2026 Holyrood election, they would be fool hardy to ignore the public mood. People want to see real progress on fairness. Scotland has powers to tax wealth more fairly to combat runaway inequality and to build a better and greener country, it’s time to use them.”

Charities respond to Winter Fuel Payment vote defeat at Westminster

In response to the House of Commons voting in favour of cutting the Winter Fuel Payment, Independent Age Chief Executive Joanna Elson, CBE said: “People in later life living in financial hardship will be rightly concerned that, despite mounting public pressure about the impact on older people on the lowest incomes, the UK Government will continue with its plans to means test the Winter Fuel Payment from this year.  It’s clear that making this decision now means many people in later life struggling in poverty will be forced to make dangerous cutbacks.

“The Chancellor still has time to reassess. Even with today’s vote, the UK Government can show it is listening to the concerns of older people in poverty, and delay this policy change until more older people start receiving Pension Credit.

“Boosting take-up is complex and will take time, the latest take-up figures show that up to 1.2 million older people could be missing out on this financial entitlement. They will already be living on a low income as they are eligible for Pension Credit, but now they will have even less money to live on this winter.

“We are also concerned about the large group of older people that just miss out on Pension Credit. Many of them are in financial hardship and do not have enough money to live well, but will still have their income cut at an already challenging time of year with energy prices on the rise.  

“In the short term we hope the UK Government listens to the evidence being shared, and doesn’t means-test the Winter Fuel Payment now.

“Long-term there must be financial security for all of us as we age.

“We urge the UK Government to lead a review where all major parties come together and agree on what an adequate income in older age is, then ensure that everybody receives it so that no one lives in poverty in later life.”

Caroline Abrahams CBE, Charity Director at Age UK said: “We’re deeply disappointed, but not surprised, that the vote to brutally means-test Winter Fuel Payment was passed today.

“As soon as the Government announced it was instructing its MPs to support it this was the inevitable result, but we would like to thank all those in every party who voted against the policy or abstained.

“There’s been a lot of discussion about the Government’s decision, but at heart Age UK’s critique of their policy is really simple: we just don’t think it’s fair to remove the payment from the 2.5 million pensioners on low incomes who badly need it, and to do it so quickly this winter, at the same time as energy bills are rising by 10%. 

“It is crystal clear that there is insufficient time to make any serious impact on the miserably low take-up of Pension Credit before the cold sets in this autumn, and the Government has brought forward no effective measures to support all those whose tiny occupational pensions take them just above the line to claim.

“It’s true they have agreed to extend the Household Support Fund until April and they deserve some credit for that, but the HSF is an all-age fund that you have to apply for, so we know it will only help a small proportion of all the pensioners who will be in need as a result of their policy change.

The Government has also tried to suggest that the increase in State Pension for older people next year as a result of the Triple Lock means there’s no need to worry about how they will cope now, but that won’t help anyone this winter and most pensioners will not benefit to the extent being suggested – either because they are on the old State Pension which attracts less of an increase, or because they don’t qualify for a full State Pension in the first place.

“The reality is that driving through this policy as the Government is doing will make millions of poor pensioners poorer still and we are baffled as to why some Ministers are asserting that this is the right thing to do.

“We and many others are certain that it is not, and that’s why we will continue to stand with the pensioners who can’t afford to lose their payment and campaign for them to be given more Government support. 

“Meanwhile, winter is coming and we fear it will be a deeply challenging one for millions of older people who have previously relied on their Winter Fuel Payment to help pay their energy bills and who have no obvious alternative source of funds on which to draw.

As a charity we will do everything we can to help them, but with so many in need and no extra support on offer from the Government at the moment it’s looking like an incredibly uphill task.”

ALL Scottish Labour MPs voted with the government, but Rebecca Long Bailey was one of more than fifty Labour MPs who refused to vote in favour of the cut. She explained why:

Former Labour Party leader and now independent MP Jeremy Corbyn also voted against the withdrwal of the payment. He said: “I voted against cuts to winter fuel payments. Politics is about choices, and the government has chosen to push pensioners into poverty.

What’s next for means testing? The NHS?

“I will always defend the principle of universalism. That is how we build a fairer society for all.”

“You could get Pension Credit” – Week of Action to drive take up

The Department for Work and Pensions (DWP) to launch Pension Credit Week of Action to boost take-up of vital benefit

  • Joining forces with charities, broadcasters and a range of partners, the campaign will encourage pensioners to check their eligibility and apply
  • Up to 880,000 pensioners could be missing out on this cash boost worth on average up to £3,900 per year

Hundreds of thousands of pensioners are being urged to apply for a benefit that could be worth on average £3,900 per year as the Department for Work and Pensions (DWP) is launching a campaign to increase Pension Credit take-up on Monday 2 September.

With as many as 880,000 pensioners missing out, the Pension Credit Week of Action aims to spread awareness and increase claims for Pension Credit, which from this year will also automatically passport eligible pensioners to receive the Winter Fuel Payment.

Joining forces with charities, broadcasters, Local Authorities, and a range of partners, the campaign will tackle myths that may prevent people applying, for instance having a small private pension, savings or owning their own home.

Families, friends and neighbours are being encouraged to reach out to retired family members to encourage them to check their eligibility and apply. 21 December is the last possible date to make a successful backdated claim in order to receive the Winter Fuel Payment.

While around 1.4 million pensioners are already receiving Pension Credit, up to an estimated 880,000 households are eligible for the support but are not claiming it.

Chancellor, Rachel Reeves, said: “The £22 billion blackhole inherited from the previous governments means we are having to take tough decisions now to fix the foundations of our economy – including making the Winter Fuel Payments available to those most at need.

“1.3 million pensioners are already going to get help with fuel bills this year because they’re claiming pension credit – but thousands more are eligible. So, if you know someone who could get pension credit and help with their fuel bills, now is the time to help them apply for pension credit.”

Work and Pensions Secretary, Liz Kendall said: “Thousands of pensioners are missing out on Pension Credit worth on average £3,900 per year. That needs to change.

“It’s easier than ever to check if you are eligible, including with our online calculator, and if your circumstances have changed since the last time you looked – I urge you to check again.

“Friends, families and neighbours can also encourage their loved ones to apply, so that they are not missing out on this vital benefit.”

Energy Secretary Ed Miliband said: “The legacy of failure on energy policy we have inherited means energy prices are set to rise in autumn. We must ensure that pensioners in the greatest need get access to help with rising bills.

“We will do everything in our power to increase take up of Pension Credit to the 880,000 households who are yet to claim – opening the door to other vital support such as the Winter Fuel Payment.

“The government will also continue our mission to deliver clean power by 2030, helping to finally give families the energy security they deserve and our country the energy independence we need.”

Pensioners whose weekly income is below £218.15 for a single person or £332.95 for a couple should check to see if they are eligible for this support which is worth £3,900 a year on average, using DWP’s online calculator.

People with a severe disability, carers and those who are responsible for a child or young person who lives with them could get more. Pension Credit can also include extra amounts for certain housing costs, such as ground rent or service charges.

This work is part of a wider plan to ensure economic stability for pensioners by protecting the Triple Lock and supporting households with their energy bills through the £150 Warm Home Discount and the Warm Homes Plan – upgrading millions of homes this Parliament. 

Over the next five years, more than 12 million pensioners could see their State Pension increase by over a thousand pounds as a result of the commitment to the Triple Lock.

Applications for Pension Credit can be made:

  • On the How to Claim page  
  • Over the phone by calling 0800 99 1234 (Monday to Friday 8am to 6pm)  
  • By printing out and filling in a paper application form  
  • For more information visit the Pension Credit GOV.UK page. 
  • The Winter Fuel Payment is worth £300 for households with someone aged 80 or over. Households with someone aged 66-79 will receive £200.
  • We will work with Local Authorities to bring together the administration of Pension Credit and Housing Benefit as soon as operationally possible.
  • People who have reached State Pension age before September 23, 2024 and are in receipt of Pension Credit, Income Support, Income based JSA, Income related ESA, Universal Credit, Child Tax Credit or Working Tax Credit, will be entitled to a Winter Fuel Payment – subject to eligibility conditions.
  • The regulations to means-test the Winter Fuel Payment will be laid on 22 August 2024. The qualifying week in 2024 for Winter Fuel Payments will be from 16 to 22 September.
  • Pensioners need to be entitled to Pension Credit for at least one day in week September 16 to 22 to be eligible for a Winter Fuel Payment for this winter.
  • 21 December is the last date for backdating a claim for Pension Credit to 22 September, assuming the claimant met the Pension Credit entitlement conditions throughout the previous three months.
  • Anyone who is entitled to Pension Credit for at least one day of the Winter Fuel Payment qualifying week will have automatic entitlement to Winter Fuel Payment. There are some exceptions which are detailed on GOV.UK: https://www.gov.uk/winter-fuel-payment/eligibility
  • People do not have to do anything extra to backdate their claim. If they make their application online, they will automatically be asked if they would like to backdate it. If they make their application over the phone the advisor will talk them through this. 
  • Around 1.3 million households in England and Wales will continue to receive Winter Fuel Payments due to some other pensioner households being eligible and expected extra Pension Credit take up due to this reform.

Pension Credit recipients by region (as of February 2024):

North East73,883
North West175,179
Yorkshire and The Humber118,633
East Midlands95,767
West Midlands130,427
East of England110,017
London190,496
South East147,763
South West111,251
Wales80,927
Scotland125,136