Nearly 10 million pensioners will no longer get Winter Fuel Payments, Rachel Reeves has announced.

The Chancellor said the lifeline taxpayer-funded payouts will only be awarded to those eligible for Pension Credit or other means-tested benefits. She said she was "angry" at having to make the swingeing cut as she blamed a £22billion Tory 'black hole' in public finances.

Furious campaigners have branded it a "targeted" attack on the elderly and warned it will increase pensioner poverty. And money saving expert Martin Lewis said the group who now qualify is "too narrow". But it was branded a "sensible choice" by the head of economic think-tank the Institute for Fiscal Studies (IFS).

Those who are eligible for means-tested payments will continue to receive them, Ms Reeves said. The Chancellor told the Commons: "I am making the difficult decision that those not in receipt of Pension Credit or certain other means tested benefits will no longer receive the Winter fuel payments.

"The Government will continue to provide fuel payments with £200 for households receiving pension credit, or £300 to households in receipt of Pension Credit, with someone over the age of 18. Let me be clear this is not a decision I wanted to make."

It was among a string of savings announced in a bad-tempered Commons announcement. She branded the Tories "grossly irresponsible" as she repeated: "If we can't afford it, we can't do it."

In the winter of 2021-22, 11.3million payments were made. Winter Fuel Payments were introduced in 1997 to help pensioners pay their heating bills. It is an annual tax-free subsidy of between £100 and £300. Economist Paul Johnson, director of the IFS, estimated this would save around £1.5billion a year.

He branded it a "sensible choice". The Chancellor, who has been in office for just over three weeks, said the Government is committed to the triple lock, which protects state pensions. Ms Reeves said she and Work and Pensions Secretary Liz Kendall would bring forward the administration of Pension Credit and Housing Benefits to make sure people aren't slipping through the gaps. She pledged to work with charities for older people.

At a Treasury press conference, Ms Reeves defended limiting winter fuel payments to benefit recipients while hiking junior doctors' pay. The Chancellor said: "The cost of not settling the pay dispute has real costs as well."

She said cancelled appointments as a result of strikes "affects everybody in society but perhaps the oldest members of our society are affected the most". She added: "I also understand why Age UK are disappointed. It's not an easy decision to announce that winter fuel payment would only go to people receiving pension credit. But it's the right decision in the circumstances in which we find ourselves to ensure that pension credit continues to go to the poorest pensioners."

Following the announcement, MoneySavingExpert founder Mr Lewis warned it would have a terrible impact. He said: "Many pensioners eke out the £100 to £300 Winter Fuel Payments to allow them to keep some heating on through the cold months. While there's an argument for ending its universality due to tight national finances, it's being squeezed to too narrow a group – just those on benefits and Pension Credit. Yet again, those just above the thresholds will be hardest hit."

He said the Government must now ensure that around 800,000 people who are eligible for Pension Credit but don't get it are helped. Mr Lewis stated: "Pension Credit is a crucial gateway benefit, giving access to a host of other entitlements, and now with the link to the Winter Fuel Payment, it makes it even more important to ensure fewer miss out."

Dennis Reed, of campaign group Silver Voices, branded it a "targeted attack on those who have devoted their working lives to this nation". He said: "The Chancellor knows that this measure will greatly increase pensioner poverty and that many people who are entitled to pension credit do not claim it. At a time when energy prices are so high this is a heartless measure.

"Labour should be ashamed of accepting more Labour votes in the recent election, while hiding their plans to attack pensioner benefits." He accused the Government of being "disingenuous", stating: "Silver Voices will lead the fight to expose the hypocrisy and cruelty of these measures".

Ms Reeves has ordered the sale of Government-owned buildings and a clampdown on excess spending as she accuses the Tories of "covering up" the dire state of public finances.

The Chancellor told MPs that immediate measures will be put in place after an audit found the previous government had overspent by £35billion - leaving a £22billion black hole. She promised to set up a new Office for Value for Money which will be tasked with finding savings straight away.

The Commons heard a black hole of around £20billion has been identified. To help tackle this, she will pledge to stamp out unnecessary spending on consultants and instruct officials to dispose of "surplus" Government-owned estates.

The Chancellor will also demand swifter savings on admin. Ms Reeves will ban future ministers from holding "surprise" budgets like the one by Liz Truss which piled misery on millions.

She told the Commons she knew things would be tough during the election campaign - but had no idea how bad. She stated: "Before the election, I said we would face the worst inheritance since the Second World War... But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know.

"Things that the party opposite covered up from the country.” She will add: “It is time to level with the public and tell them the truth. The previous government refused to take the difficult decisions.

"They covered up the true state of the public finances. And then they ran away. I will never do that."

Ms Reeves ordered a review of spending across departments and arms-length organisations when she came to office at the start of the month. This threw up a number of nasty surprises, Environment Secretary Steve Reed revealed on Sunday.

He claimed the Tories were "spending money like there's no tomorrow", but hid how bad things were. He accused the former government of "politics of denial and cover up", stating: "The inheritance from the previous Government has been catastrophic, they were spending money like there's no tomorrow, they called an election, they've run away and they're trying to deny it."

The Cabinet member said he and colleagues had been stunned by some of the things they'd uncovered. He said the crisis in Britain's prisons, which means inmates are being freed early to make space for criminals, and the eye-watering cost of the Rwanda deportation project are examples.

Quizzed on whether Labour really had no idea what to expect, Mr Reed said: "It's not only that we didn't know, the Prime Minister (Mr Sunak) deliberately covered it up." He went on to tell the BBC's Victoria Derbyshire: "The point is, we're going into our departments and we are finding additional pressures that nobody knew about, and the Government had not disclosed."

The Environment Secretary said he'd found the state of flood defences is "far worse than we were led to believe" - putting more pressure on public finances. He said former ministers kept quiet about the extortionate cost of the Rwanda scheme - with an enormous £700million spent, despite the Tories previously insisting this sum was less than £400million.

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Last week Home Secretary Yvette Cooper told incredulous MPs that the Tories had committed to spending £10billion on the partnership. It comes as Ms Reeves faces calls to raise much-needed funds with a shake-up of capital gains tax and inheritance tax.

A bombshell report by the Resolution Foundation found the Treasury could raise over £10billion by targeting unearned wealth. Simon Pittaway, a senior economist at the think-tank, said the UK has been "riding the wave of a wealth boom", but the tax system has failed to keep up. He said: "Too many families have missed out on this wealth boom.

"Over one in four people say they wouldn’t be able to pay an unexpected expense of £850, highlighting that too many families lack a basic financial safety net that even moderate levels of wealth can provide. Wealth taxes have failed to catch up too."

Mr Reed said a "spending review process" would be carried out to identify savings before taxes are looked at. But he ruled out rises to income tax, VAT or national insurance.

He said: "In terms of individual taxes, we need to go through the spending review process so we can fully understand how we can generate efficiencies before looking at taxation. But we've ruled out increases in income tax, VAT and national insurance. We will not put up taxes on working people and we will seek to find efficiencies in the way the government is operating so we can reduce the burden of taxation over the lifetime of this government".

A Government spokesman said Ms Reeves' audit will show the previous administration "made significant funding commitments for this financial year without knowing where the money would come from". It will reveal that Britain is "broke and broken".

Tories shot back at Ms Reeves, accusing her of trying to “con” the public into accepting tax rises. Lib Dem Treasury spokeswoman Sarah Olney said: "It is vital the government takes steps to get the public finances back on track so our NHS can get the investment it so desperately needs. It is scandalous that families are paying sky high taxes for crumbling public services."