Budget will require tough choices on taxes, benefits and spending, warns Reeves | Benefits

The October budget will require “difficult decisions on taxes, spending and benefits,” warned Finance Minister Rachel Reeves.

Her comments came after Housing and Planning Minister Matthew Pennycook said plans to cut heating allowances for pensioners in England and Wales over winter would not be watered down after dozens of Labour MPs abstained from a key vote in the House of Commons on Tuesday night.

In her speech to television, Reeves also defended the cut in heating allowances for all but the poorest pensioners, calling them “the right decision”. That day, new figures showed that the British economy stagnated for the second month in a row in July.

“I have been very clear that the Budget on 30 October will require difficult choices on tax, spending and welfare,” she told the BBC. “But the price – if we can restore stability to our economy and bring investment back to the UK – is economic growth, good jobs and decent wages in every part of our country to deliver on the enormous potential that we have.”

Reeves said she had not wanted to cut winter heating subsidies for millions of pensioners, but had been forced to do so by the “black hole” in government finances.

Meanwhile, Pennycook defended the Government's policy on winter heating allowances in the morning after MPs voted to remove the allowance from all but the poorest pensioners.

A Conservative motion to reject this move was defeated by 348 votes to 228.

Pennycook said he understood the concerns many colleagues had raised, but added: “We will not weaken this policy. We believe it is the right decision.”

Asked about the government's decision to give public sector workers pay rises while cutting winter heating allowances, he told Sky News: “This government has implemented the recommendations of the independent public sector pay review bodies. Unless the opposition in Parliament is claiming that it rejected those recommendations out of hand and continued with industrial action which has been extremely costly to the British economy, then it should have been faced with the same decision.”

MPs rejected the Conservative motion on Tuesday by a majority of 120 votes. About a dozen Labour MPs abstained, presumably deliberately, and one, Jon Trickett, voted against.

Appearing alongside the veteran MP were five of the seven Labour MPs who were suspended after voting to abolish the cap on the two-child benefit: Ian Byrne, Apsana Begum, Zarah Sultana, Richard Burgon and John McDonnell.

Burgon told X: “For me, this was a matter of conscience. Not only will this cut put many pensioners in my constituency who are already living in poverty under further pressure, it will also cost lives.”

However, it is the high number of abstentions that will be of concern to Downing Street and Labour leaders. The Government is seeking to use the debate to reinforce its argument that cutting the winter heating allowance for all but the elderly recipients of pension benefits such as the Pension Supplement was a tough but unavoidable decision.

Among those who abstained after their speeches was Rachael Maskell, MP for York Central, who has been one of the most vocal critics of the plan within the Labour Party and has called for the plan to be delayed and reconsidered.

Pensioners, she said, “make the most difficult budget decisions, more difficult than those of the Treasury, where there is a choice. They have no choice. They have to have a roof over their heads, they have to pay for their food and they have to pay for their heating.”