British pensioners living in Malta and several other countries are to lose their right to claim winter fuel payments as part of a £11.5 billion package of cost-cutting, Sky News reported this evening. Claims will be considered under a "temperature test" from Autumn 2015 to ensure pensioners in hot countries do not get the allowance.

Chancellor of the Exchequer George Osborne also announced that public sector workers will lose their right to automatic pay rises and jobless people will have to wait seven days to claim benefits.

In a Spending Review for 2015/16 which extended the age of austerity beyond the next general election, Mr Osborne also gave further details of a new Welfare Cap which will "put a limit on the nation's credit card" from 2015.

But he had a £100 boost for council tax payers, offering funding to allow local authorities to extend the freeze on bills for a further two years.

And he said that £300 billion of investment over the next six years in capital projects would boost sustainable growth and help "turn Britain around".

Chief Secretary to the Treasury Danny Alexander will unveil £100 billion worth of specific infrastructure plans, expected to include new roads, railways, science facilities and schools, in a statement to the Commons on Thursday.

Public sector pay rises will be limited to an average of up to 1% for 2015-16, while the "antiquated" system of automatic progression pay - which rewards employees with an upgrade for each year of service - will be scrapped in the civil service, schools, the NHS, prisons and police, though not the armed forces.