Rachel Reeves's attempt to convince disgruntled members to back unpopular decisions taken by the UK Government could be derailed by a fight with unions over the cuts to winter fuel payments.

The Chancellor is due to address the Labour Party conference today, where she will tell delegates next month's "painful" budget will lay “the crucial foundation" of the party's ambitions for the country. 

However, members are set to debate the decision to means test the annual payment.

Both Unite and the Communication Workers Union have put forward calls for the policy change to be overturned.

Pensioners impacted by the cut will hold a protest outside the conference in Liverpool this afternoon. 

The Chancellor announced that she would restrict the annual payout in England and Wales to those on pension credit or certain other benefits as part of her plan to tackle a £22 billion black hole.

According to ministers in Edinburgh that left them with a £160 million funding shortfall, forcing them to follow suit. 

The Scottish Government’s analysis says that means around 900,000 Scottish pensioners will lose out, with just 130,000 receiving the payment.

Across the UK, some 10 million pensioners will be affected.

In her speech, the Chancellor is expected to say: “Conservative austerity was a destructive choice for our public services – and for investment and growth too.

She is expected to add: “We must deal with the Tory legacy and that means tough decisions. But we won’t let that dim our ambition for Britain.

“So it will be a budget with real ambition. A budget to fix the foundations. A budget to deliver the change we promised. A budget to rebuild Britain.”

In a signal of Labour keeping its manifesto commitments, Ms Reeves will promise not to raise national insurance, income tax and VAT.

She will also say corporation tax is to remain at its “current level for the duration of this Parliament”.

Unite has already unveiled billboards around Liverpool with the slogan “Defend the winter fuel payment.”

The union’s general secretary Sharon Graham said: “The government’s winter fuel policy needs to be reversed.

"Targeting everyday people without much money is not a tough choice - it is a mistake. There is no reason why we have to choose between paying workers and keeping pensioners warm.”

Maggie Roberts, Unite Retired Members vice-chair, said: "Pensioners on as little as £220 per week will be missing out on the winter fuel payment this year.

"This isn't a policy which takes from the rich to give to the poor. This is a policy which takes from pensioners to pay for a crisis not of our making.

"My own constituency of Weston-Super-Mare voted in a Labour MP for the first time ever this year. We have lots of pensioners living here. I know a lot of them won't be voting Labour again. The government must reverse its decision on winter fuel."

SNP Westminster leader Stephen Flynn said the Chancellor needed to “put down the axe.”

He said: “Rachel Reeves is repeating the Tories’ mistakes by imposing damaging austerity cuts, which will starve the economy of investment and make things worse for families and public services.

“Fourteen long years of Tory cuts proved beyond doubt that austerity simply doesn’t work. Instead of ‘fixing the foundations’ it weakened them – reducing economic growth, squeezing wages, harming public services and pushing families into poverty.

“It’s no wonder the Labour Party is plummeting in the polls, when it has broken its promises to voters and is imposing billions of pounds of cuts, which economists are warning will hit growth.”

Scottish Conservative finance spokeswoman Liz Smith MSP said: “Labour is acting daft when it comes to the economy.

“This is all because there has been a huge backlash about their decision to betray pensioners by scrapping universal winter fuel payments.

“No one will be fooled by the Chancellor when she feigns surprise at the tough financial choices she faces, just as no one in Scotland is fooled by the SNP repeatedly trying to blame Westminster for all the problems in the Scottish economy.

“Despite receiving record block grants from Westminster and imposing the highest taxes in the UK, the SNP has run our public services into the ground and created a huge black hole in Scotland’s finances."