Chancellor Rachel Reeves says winter fuel payments will now be restricted to those on pension credits or other means-tested benefits
She says the Labour government has inherited a projected overspend of £22bn from the Conservatives
The projected overspend on the asylum system, including the Rwanda plan that Labour has now scrapped, was more than £6.4bn for this year alone, she says
She has also cancelled some road and rail projects - including the tunnel under Stonehenge
Reeves also confirmed the government has made a 22% two-year pay offer to junior doctors. Teachers and NHS workers will also get a 5.5% rise
Shadow chancellor Jeremy Hunt says Reeves is "shameless" in paving the way for tax rises - and October's Budget will be a "biggest betrayal in history by a new chancellor"
Reeves announces that a Budget will be held on 30 October, which will be accompanied by a full fiscal and economic forecast from the Office for Budget Responsibility.
The Budget will involve taking difficult decisions to meet the government's fiscal rules across spending welfare and tax, she adds.
The chancellor confirms she is ending universal winter fuel payments, which are currently paid to all pensioners.
She says those not receiving pension credits or other means tested benefits will not receive winter fuel payments from this year onwards.
"Let me be clear, this is not a decision I wanted to make," she says.
She calls the decision "the responsible thing to do".
Moving now to the NHS and social care, Reeves confirms the Conservative pledge to build 40 new hospitals by 2030 is now under review.
She says only one new project unveiled under this banner has opened to patients and only six have begun their main construction activity.
A complete review will be completed into the new hospital programme.
She further says there will be no reform to adult social care charges - it will not be possible, she adds.
Reeves says the last autumn set out plans for a £150m investment fund but "not a single project has been supported from the fund".
Therefore it is being cancelled today, she announces, because "if we cannot afford it, we cannot do it".
Reeves announces the first of the transport projects to be scrapped are works on the A303 (the Stonehenge tunnel), A27 (Arundel bypass) and the Restoring our Railways scheme.
Cancelling the railway restorations will save £85m, and while this is met with groans, she says individual projects can be assessed.
Reeves says in total there are £1bn of various transport projects committed to next year that are "unfunded" and says the transport secretary will undertake a review of those commitments.
Reeves announces Labour is scrapping the Advanced British Standard qualification - introduced by former prime minister Rishi Sunak.
She says the cost of the proposal "rises to billions" in future years and if the government cannot afford it, they will not pay for it.
"This was supposed to be Sunak's legacy - but it turns out he didn't put aside a single penny to pay for it," Reeves says.
Simon Jack
Business editor
Reeves says the cost of funding public sector pay rises will be £9bn.
She will ask departments to find £3bn worth of cuts in “non-essential” spending - including outside consultants.
Reeves says the government will save money by scrapping the Rwanda scheme, cancelling the Stonehenge tunnel, development to the A27 work and pausing plans to restore old railway lines will also save money.
She has also cancelled the retail sale of the government's remaining NatWest stake and will sell it privately in 2025 instead.
Reeves now sets out how the government hopes to meet the costs for the pay rises this year, which she says will require "difficult choices".
She will ask all departments to find savings totalling at least £3bn and adds she will work with them to find savings ahead of the autumn budget.
Reeves will also be asking departments to find 2% savings in back office costs.
The government has agreed to a pay deal for junior doctors with the BMA, Reeves confirms.
As we reported earlier, the deal involves an average 22% pay rise over two years.
She says this comes off the back of the worst set of strikes in a generation which cost the taxpayer £1.7 billion past year.
"Today marks the start of a new relationship with the government and staff working in the NHS," Reeves adds.
Reeves says that she will accept "in full" rises recommended by independent pay review bodies for public sector workers. These will include NHS staff and teachers.
It will mean "giving hardworking staff the pay rise they deserve," she says, while ensuring that we can recruit and retain the people we need.
Reeves says the last government overspent on the asylum system - including the Rwanda plan - by a projected £6.4bn this year.
"That was unfunded, and it was undisclosed," she tells the Commons.
She says the previous government "covered up the true extent of this crisis".
Reeves says the Conservatives claimed the "books were open" on public spending.
"How dare they," she says. "It is not true" - a comment met with shouts of "hear hear" from the Labour benches.
She says there are "clear" instances of specific budgets that were overspent and unfunded promises that were made.
Tory MPs can be heard noisily objecting to those comments.
Labour plans to reduce the "black hole" by £5.5bn this year, and over £8bn next year, Reeves says.
She clarifies that this deficit is money the Tories were already spending this year "and had no ability to pay for", claiming they "hid" this from the country.
"They continued to make unfunded commitment after unfunded commitment knowing the money was not there," she says.
Reeves says that when she first arrived at the Treasury she was told by officials that the previous government's day-to-day spending plans were different than they had claimed.
"It wasn't even close," she was told.
She claims she was told the additional spending pressures were £35bn.
Taking various things into account, she says Labour has inherited an overspend of £22bn .
After a brief interruption from the Speaker calling for order, Reeves says the previous government "covered up" things from the opposition and the country.
"This is the real spending situation," Reeves tells the Commons.
Reeves starts on her first point around the situation she says Labour has inherited.
She says she was "honest" during the campaign around the difficult choices that would come with the current state of the economy.
Reeves says the British people also knew and it's "why they voted for change".
Now she adds it is clear there were things she "did not know" before the election.
Reeves says she will do three things in her statement this afternoon: Expose the scale and seriousness of the inheritance; lay out immediate action Labour are taking to deal with it and set out longer term plans.
Faisal Islam
Economics editor
This is an unusual set of announcements. In her first weekend in the job, the new chancellor tasked her officials with finding a list of unfunded and underfunded spending promises made by the previous government.
Rachel Reeves' officials say she is “genuinely shocked” by what came back, which only could have been revealed with access to the books.
The test of that will be in the 30 page document to be published when she sits down in the House of Commons this afternoon.
Reeves is expected to swing the axe on some large public sector projects within this financial year. We will see cancellations, pauses, and some reprioritisation of spending.
But we will also see some new spending on accepting the recommendations from public sector pay bodies for a range of workers from teachers to prison officers and the military.
A date will be announced for the Budget and Spending Review, probably in October. This announcement will set up the tram lines for that set of more detailed decisions, including on tax.
The chancellor is on her feet in the House of Commons and has started speaking.
We'll bring you the latest here, or press play above to watch the statement live.
She begins by sending her thoughts to those impacted by events in Southport.
By Anthony Reuben
Beware of talk of black holes in the public finances or a £20bn shortfall today, which imply a problem that must be fixed.
The government is talking about whether it can meet its own rules on borrowing.
It could certainly decide to cut spending or increase taxes to make up that shortfall.
But it could also decide to change its fiscal rules. The government is taking decisions - it is not being forced to do anything.
Also beware of people trying to compare government finances with household budgets.
They aren’t comparable - countries don’t retire or die and are not expected to pay off their debts entirely.
Image source, PA MediaReeves is scheduled to speak to Parliament in just over 10 minutes
We've just received this photo of Chancellor Rachel Reeves in her office at No 11 ahead of her statement to the House of Commons this afternoon.
She's due to speak about the findings of a Treasury audit into the state of the public finances.
We will be covering her address live right here with all of the usual analysis, so stick with us.