Rachel Reeves has challenged the Tories to “bring it on” as she declared she was ready to “fight” them over the future of Britain.

In her keynote speech to the Labour conference, the chancellor defended her decision to hand inflation-busting pay rises to public sector workers.

She said the move – which has been criticised by the Conservatives – showed that the government was on the side of “working people”.

Reeves, who also had to cope with a heckler who tried to disrupt her speech to the party faithful, said: “I am proud to stand here as the first chancellor in 14 years to have delivered a meaningful, real pay rise to millions of public sector workers.

“We made that choice. We made that choice not just because public sector workers needed that pay rise, but because it was the right choice for parents, patients and for the British public.

“The right choice for recruitment and retention, and it was the right choice for our country.

“If the Conservative Party want a fight about this, if they want to argue we should have ignored the independent pay review bodies, that public sector workers’ pay should fall further behind the cost of living, that ordinary families should pay the price of industrial action.

“If the Conservatives Party want a fight about who can be trusted to make the right choices for our public services and those who use them – then I say bring it on.”

The chancellor also defended her controversial decision to axe winter fuel payments for 10 million pensioners, saying it was necessary because of the £22 billion “black hole” in the nation’s finances left by the Tories.

But Reeves said: “I made the choice to means test the winter fuel payment, so that it is only targeted at those most in need.

“I know that not everyone – in this hall, or in the country – will agree with every decision I make. But I will not duck those decisions – not for political expediency, not for personal advantage.

“Faced with that £22 billion black hole that the Conservatives left this year and with the triple lock ensuring that the state pension will rise by an estimated £1,700 over the course of this parliament, I judged it the right decision in the circumstances we inherited.”