The Treasury will not axe the single-person council tax discount, Downing Street has indicated.

There had been suggestions that the government was considering scrapping the perk in a bid to fill the £22bn fiscal black hole it claims it has inherited from the previous Conservative government.

Over the past few weeks ministers have refused to rule out ditching the measure that entitles those who live alone to a 25% discount off their council tax bill – and as recently as this month, Sir Keir Starmer said decisions on the public finances had to be looked at “in the round” when asked about the issue by reporters.

However, the Telegraph reported on Sunday that Treasury officials had said that Rachel Reeves, the chancellor, would not scrap the perk.

Asked whether the report was correct, a Downing Street spokesperson said: “I would not steer you away from those reports.”

Politics latest: Chancellor heckled during speech at Labour conference

The change in position comes after Ms Reeves delivered her first speech as chancellor at the Labour Party conference in Liverpool.

Ms Reeves, who has faced criticism over her decision to scrap the winter fuel allowance for most pensioners, faced heckling in the hall from a protester who appeared to call for a halt to arms sales to Israel and for action on the environment.

A young man in the middle of the audience stood up and could be heard shouting: “We are still selling arms to Israel, I thought we voted for change Rachel, climate breakdown is on our doorstep.”

Others shouted: “Free Palestine.”

Shouts of “stop oil” were also heard from around the audience.

Campaign group Climate Resistance has claimed responsibility for the protest and accused security of “violently” apprehending one of their protesters.

Ms Reeves continued her speech and responded by saying that Labour had become “a party that represents working people, not a party of protest”.

The rest of the chancellor’s speech was centred on the announcement that £7m of funding would be put towards a pilot scheme to introduce breakfast clubs to 750 primary schools across England this summer term.

The government will then look to expand the scheme to provide breakfast to all state school pupils aged four to 11 in England – one of Labour’s manifesto pledges. The pilot will be used to find out the best way of rolling out the policy.

The chancellor also sought to strike a more optimistic tone following criticism that the government was relying too heavily on a vision of “doom and gloom”.

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She said: “Because I know how much damage has been done in those 14 years, let me say one thing straight up: there will be no return to austerity. Conservative austerity was a destructive choice for our public services and for investment and growth too.

“Yes, we must deal with the Tory legacy and that means tough decisions but I 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 that we promised, a budget to rebuild Britain.”