Rachel Reeves defended the decision to restrict Winter Fuel Payments as rising energy bills are set to hit pensioners.
The Chancellor repeated her claim that Labour inherited a £22 billion black hole in the public finances from the Tories.
She told broadcasters in Scotland: “When I became Chancellor of the Exchequer, I inherited a £22 billion black hole in the public finances.
“Taking no action wasn’t an option, because that would have made it difficult for the Government to finance its needs, and we would have ended him up in the same position that the previous Conservative government ended up in, with mortgage rates and interest rates spiking and pensions being put in peril.
“So we had to take difficult decisions in very challenging circumstances, because the previous government was overspending by £22 billion just this year alone, and we’ve had to take action to get approval for public finances.”
She added: “It’s not decision I wanted to make.
“It was a decision that I had to make in incredibly challenging circumstances to put our public finances on a firm footing.”
Chancellor Rachel Reeves (Image: SKY NEWS)
Ms Reeves also refused to rule out a rise in inheritance tax or capital gains tax.
Asked directly whether she could rule out the tax increases, she replied: “I’m not going to write a Budget two months ahead of delivering it. We’re going to have to make difficult decisions in a range of areas.”
Ms Reeves added: “The UK economy is just emerging from the recession that we entered into last year, and two quarters of positive economic growth is not going to reverse more than a decade of economic stagnation.
“Much work is needed to rebuild the foundations of our economy so we can rebuild Britain and make working people better off, and that is why growing our economy is absolutely essential.”
She continued: “Unless we grow the economy, we’re going to continue to be in a situation where taxes are at too high a level and public spending is not sustainable.
“We’ve got to break out of this doom loop, which is why growing the economy is the number one priority of this new Government.”
