Rachel Reeves vows ‘no austerity’ however departments might nonetheless face spending cuts

Rachel Reeves has said there will be “real terms increases” to Government spending over this Parliament but refused to rule out cuts in individual areas.

The Chancellor promised there would be no more austerity as she sought to strike a more hopeful note ahead of next month’s Budget. In a major speech to Labour conference today, Ms Reeves will promise to “rebuild Britain” with “no return to austerity”, echoing a pledge made by Keir Starmer to Mirror readers.

But she made it clear that tough choices are looming. Ministers are locked in battles with the Treasury over cash for their departments that could define the next Parliament.

Ms Reeves said there would be more cash for public spending but refused to say that all departments would be protected from cuts. speaking to BBC Radio 4’s Today programme, Ms Reeves said: “There won’t be a return to austerity, there will be real terms increases to government spending in this Parliament.”

She said she has been “really clear” that the “only way to sustainably fund public services is through growing the economy.”

When pushed further on her spending plans, Ms Reeves added: “What I’m saying is there will not be real terms cuts to government spending, but the detailed department by department spending will be negotiated.”

Amid a backlash over plans to axe the winter fuel allowance for millions of pensioners, Ms Reeves said that she never wanted to make the cut.

She said: “I was not planning to make these changes to winter fuel payment. These were not changes that I expected to make or wanted to make, but when faced with a situation when there’s a £22 billion black hole – not some year in the future – but this year in the public finances, it requires difficult decisions.”

It comes as Labour faces a conference clash over the winter fuel payment as unions push to reverse the cut. Unite, one of Labour’s biggest union backers, and the CWU are seeking to force a vote on the issue. However plans to a debate today appeared to have been pushed back to Wednesday.

In another interview on LBC, she said: “I don’t know the situation about when votes take place, but if delegates want a vote on this they will get a vote on this. I don’t know the timing, but we’ve already had a vote in Parliament where it was overwhelmingly passed.

“This isn’t the decision that I wanted to make. It wasn’t a decision that I expected to make, but given the state of the public finances I inherited I think it was right to restrict the winter fuel payment to the poorest pensioners and to make sure that all of the pensioners, entitled to it are getting it.”