Labour's Ellie Reeves justifies pensions raid, and looming tax raids (27Aug24)

now let's return to our main story because the Prime Minister will deliver a speech later this morning in which he's expected to say it will not be business as usual when Parliament returns next week this comes as his government faces criticism over plans to raise taxes and cut winter fuel payments for millions of pensioners let's speak now to Labour party chair Ellie Reeves morning to you so are things going to get worse before they get better if they get better good good morning uh the Prime Minister will use his speech this morning to talk about the need to fix the foundations we've inherited a financial uh black hole from the previous government and that requires tough choices uh so you know it's really important that the prime minister is honest with the public about the scale of the challenge when we got into government just a few weeks ago uh we discovered that there was a 22 billion black hole in the country's finances and it's that which has led to that really tough decision uh around the winter fuel allowance we didn't want to be in a position where we had to make that decision but because of the state of the finances that we were left with that it was a decision that that had to be made but also you are now in government you have the power to make choices and this government has chosen to spend on public sector pay and now you might be able to say that as a result pensioners are suffering well we've had uh industrial um disputes that have gone on for a long time that the previous government didn't have the appetite to resolve and that meant people couldn't get to work on the train or they couldn't get the hospital appointment that they needed it's also uh important to note that uh with the pay review review bodies the previous government uh didn't factor in anything around uh affordability uh again something that we inherited from the previous government but with the winter fuel allowance it's also important to remember that pensioners who are in receipt of pension credit will still get the winter fuel allowance and there's something like 900,000 pensioners who are eligible for pension credit that aren't uh currently um uh receiving it uh so we want to make sure that everyone that's entitled to uh that benefit uh gets it and in turn they would still get the winter fuel allowance it's a really difficult and tough uh decision but we saw what happened when uh the previous government lost control of the country's finances with that Liz truss mini budget it crashed the economy it sent interest rates spiraling that had a huge impact on families on businesses and we have to be honest with the public we can't have a repeat of that uh which is why it's incredibly important that we fix the foundations uh and we don't have um uh the losing control of the the country's finances that we saw previously again I would say that that this is a choice you have made you have chosen that pensioners will suffer and chosen to put the money somewhere else well pensioners who are ince receipt of pension credit was to get the winter fuel allowance it's not a decision that we wanted to to take it's a decision that we've had to take to keep control of the country's finances and avoid a return to what happened after that mini that mini budget that crashed the economy because it included unfunded spending commitments um pensioners um will still get the triple lock on their uh pension pensioners that receive pension credit will still get the winter fuel allowance we've got an ambitious program to insulate the coldest homes uh which will benefit many pensioners uh as well so these are tough choices but they're tough choices because of the state the country has been left in after 14 years of conservative government so pensioners who might might be on £12,000 are going to lose out they're going to lose money they're going to need to find that extra money from somewhere else do you think £12,000 is enough to manage on this is tough choices this is tough choices because of that 22 billion pound black hole in the country's finances we didn't want to be in this uh position uh we didn't want to have to make these choices we're making them because of that black hole in the country's finances look you know if we did nothing at all then the risk would be exactly the same as what happened after that M mini budget from Liz trust the markets would crash uh interest rates would go skyrocketing uh again people are still paying the price of that mini budget in their mortgage repayments and I don't think that your viewers that families and businesses would thank us if we allowed that to to happen again so it is a tough choice uh and you know we know how difficult uh these choices uh are uh and the Act of them but we need to make sure that we have control of the country's finances um we know there has been concerns raised by members of your own party in fact outside your party the director of aguk has described this decision as Reckless and wrong what would you say to that it's difficult it's a difficult decision it's one that we didn't want to have to be in a position to have to make but we won't play hard and loose with the country's finances we know the consequences of that and families and businesses are still paying the price of that it's a really difficult decision uh a really tough decision but you know when the Prime Minister makes his speech today he'll talk about those tough uh choices under the last government we saw sticking plaster politics papering over the cracks without dealing with the foundations and things will be different uh under this labor government you know people voted for change just uh eight weeks ago and we were honest with the public in that general election campaign about the uh tough choices and the estate of our public services and of the country's finances uh and you know it's important that we are honest with the public uh about the the difficulties and what we have uh inherited okay you say you were honest during that campaign in May K starma urged the conservatives to rule out scrapping winter fuel payments now now he's in power he seems to have changed his mind when we got into government just eight weeks uh ago uh one of the first things that the chancellor uh did uh was an audit of the country's finances and that's what revealed that 22 billion black hole the obr uh the office of B budget responsibility didn't know uh about uh this uh overspend in the first quarter of this financial uh year uh the the the the over was something like 5 billion uh pounds which is unprecedented we need to get a firm grip of this because if we don't we will see a return of what happened when the previous government lost control of the country's finances Ellie Reeves thank you very much indeed