Politics latest: Chancellor under more pressure over cut to winter fuel payment (2024)

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By Paul Kelso, business correspondent

Senior business leaders have welcomed discussions with Angela Rayner over proposals to improve workers' rights as "positive", but warned the "devil will be in the detail" of legislation due to be put before Parliament next month.

The deputy prime minister and business secretary, Jonathan Reynolds, met the bosses of major employers including John Lewis, Octopus, BT, McDonald's and Sainsbury's in Whitehall on Tuesday, at the start of a consultation over the new government's plans.

Labour's manifesto promised to overhaul employment rights, with measures including the right for all "zero hours" workers to be offered a contract in line with their normal hours, and the extension of full employment rights to all workers from day one.

The meeting comes amid concern among employers and business groups that a reduction in flexibility as employers could increase costs and hamper their ability to drive growth.

Several businesses present told Sky News the atmosphere was constructive and friendly, with the emphasis on Ms Rayner and Mr Reynolds explaining what they have planned, and listening to the concerns of employers.

Business leaders are understood to be concerned over how the phasing out of zero-hours contracts will be achieved. It's a key issue in the hospitality and retail sectors which employ large numbers of younger and part-time workers.

Ministers have proposed that every worker must be offered a contract reflecting typical hours worked over a 12-week period, but there is concern that metric could lock employers into hours irrespective of seasonal fluctuations.

By Jenness Mitchell, Scotland reporter

The Scottish government has confirmed spending cuts of up to £500m.

Finance Secretary Shona Robison said the "direct savings" were necessary to support the Scottish government's 2024/25 budget.

In a pre-budget fiscal update to the Scottish parliament on Tuesday, Ms Robison said: "Prolonged Westminster austerity, the economic damage of Brexit, a global pandemic, the war in Ukraine, and the cost of living crisis have all placed enormous and growing pressure on the public finances."

Pay was said to be a "significant driver" of in-year pressures, with potential costs of up to £0.8bn beyond the Scottish government's budget in this financial year alone.

A number of cost-saving measures have previously been announced, including the reintroduction of peak ScotRail fares, axing universal winter fuel payments for pensioners, and scrapping a free bus travel scheme for asylum seekers.

The cuts have been made ahead of the UK government's budget in October, which Sir Keir Starmer has warned is going to be "painful".

Last week, experts at independent economic forecaster the Scottish Fiscal Commission (SFC) said while UK government policies contribute to pressures on the Scottish budget, "much of the pressure comes from the Scottish government's own decisions".

By Alix Culbertson, political reporter

The government's "black hole" could be bigger than the £22bn it has claimed as cabinet ministers are being pressured to scrap projects immediately to fill it, Sky News understands.

After Labour won the election in July, Chancellor Rachel Reeves accused the previous government ofleaving a £22bn shortfallin public finances they had not disclosed.

She promptly cancelled several projects, including 40 new hospitals, reforms to adult social care charges, a new Advanced British Standard qualification, and several road and train projects - and reduced the number of pensioners who will get the winter fuel allowance.

But because the black hole is for this year alone, it has to be filled quickly - which poses the question of how…

One of the Labour Party's manifesto promises was to nationalise the UK railways.

They are planning to do this through the Passenger Railway Services (Public Ownership) Bill.

Instead of buying out the various franchises, this bill aims to bring railways under government control once current private contracts lapse.

MPs tonight voted to pass its third reading in the House of Commons - so the bill is now moving to the House of Lords, where peers will consider it.

Attempts by Conservative MPs to amend the bill were rejected by the Labour majority.

Shadow Great British Railways

Labour's plan is to create a body called Great British Railways to run the trains for the government.

The real body cannot be spun up while the legislation is trundling through parliament, but Transport Secretary Louise Haigh has set up a "shadow Great British Railways" in the meantime as a sort of replacement service.

She says it will "bring together the department [for transport]'s passenger services, Network Rail and the operator of last resort".

This means the "railways will begin to act as one coherent system with a political backing to make decisions in the public interest" for the "first time in 30 years".

Yesterday, Foreign Secretary David Lammy announced the UK would suspend 30 of the 350 export licences it had granted for weaponry to be sent to Israel.

Stephen Flynn, the Westminster leader of the SNP, is now calling for Mr Lammy to publish the legal advice which led to the decision.

He told Sky News: "In order to justify what he has done, I think it's only fair and reasonable for the foreign secretary to publish the evidence, publish the advice, allow us to scrutinise it and to scrutinise him and his decision-making."

Watch foreign secretary's announcement:

SNP wants 'blanket ban'

The MP highlighted Mr Lammy had called for legal advice on the subject to be published when the Conservatives were in power.

The SNP has long been critical of Israel's conduct in the Middle East, including in the current conflict sparked by the 7 October attacks by Hamas.

Mr Flynn said a "blanket ban" on weapons exports is needed due to the "mass destruction of a civilian population in an area they cannot escape" being carried out by Israel.

He also challenged the notion that the UK's action's yesterday sent a message on the world stage as it did not go far enough.

One of the most controversial proposals by the new government is to scrap the winter fuel payment for 10 million pensioners.

Speaking to Sophy Ridge, Labour peer Baroness Ayesha Hazarika says: "I'm pretty saddened about this policy.

"I think lots of Labour MPs, I think Rachel Reeves is, I think most of the cabinet are, not over the moon about this policy decision."

She adds: "I think MPs are not going out and having public spats, but behind the scenes, I know there are a lot of conversations being had because there are concerns."

She is joined in the studio by Conservative peer Baroness Sayeeda Warsi.

The former Tory minister agrees there are wealthy pensioners who do not need the fuel payment - but the threshold set by the current government is too low.

She notes the policy of reducing support was also considered by the Conservative-Lib Dem coalition - and at the time Labour opposed it.

Liberal Democrat leader Sir Ed Davey tells Sky'sSophy Ridgethe government made a mistake by announcing it would abolish the winter fuel payment for millions of pensioners.

He acknowledges "a huge problem" with the country's finances and they need fixing, but says "this is not the way to do it".

"The idea we should remove winter fuel payments from millions of pensioners as we go into winter, as we see Ofgem raising the cap on energy fuel prices over 10% - this is just wrong."

Sir Ed says the Lib Dems would instead look to plug the apparent gap in the public finances by asking social media companies, oil and gas giants, and "very wealthy billionaires" to pay more tax.

He also notes scrapping the winter fuel payment was not in the Labour manifesto and pensioners "shouldn't really be the first target".

The Lib Dems will vote against the policy, he adds.

Sophy Ridge begins her conversation with Sir Ed Davey on the UK's relationship with Europe.

It follows Sir Keir Starmer's recent trips to Paris and Berlin, seeking a "reset" with the continent, but also the deaths of at least 12 people crossing the Channel in a small boat on Tuesday.

Labour should 'get round the table' with Europe

Sir Ed says the government should be working more closely with EU allies to tackle boat crossings, to take down the smuggler gangs, and says previous Tory policies hadn't worked.

"The Liberal Democrats think the government should be getting around the table, being active [with Europe]," he says.

"That didn't happen under the Conservative government. It's one of the reasons why the asylum immigration system is in such a mess."

Youth mobility scheme 'would be brilliant'

But Sir Keir has stopped short of reversing any aspects of Brexit, like rejoining the single market or allowing freedom of movement.

Sir Ed says it's not "the right time" for such aspirations, but believes the prime minister should embrace the EU's desire for a youth mobility scheme allowing easier travel for people to work and study.

"I think it would be brilliant for British young people, to be able to get back that freedom to travel and to work and study - and I think our economy would benefit too."