Treasury insiders say cuts to welfare spending and government budgets will be in the ‘billions’, as Rachel Reeves faces calls not to become “Labour’s Austerity Chancellor” – and we want to hear your thoughts
Rachel Reeves is expected to announce several billion pounds worth of spending cuts to the welfare bill and other government budgets in the upcoming Spring Statement – and we want to hear your thoughts on the move.
The Treasury has confirmed the forecast will be presented in Parliament on March 26, but Reeves is facing calls not to become “Labour’s Austerity Chancellor” following speculation over major spending cuts. The proposals were reviewed by the Office for Budget Responsibility (OBR) yesterday ahead of the announcement later this month.
As part of the plans, the Department for Work and Pensions (DWP) – which oversees benefits like Universal Credit and PIP – is predicted to bear the brunt of these cuts. It comes after a Government insider said the “world has changed a lot” since the Budget in October, when the OBR had estimated a £9.9billion spending capacity for the Chancellor.
The watchdog’s forecast is now expected to downgrade due to global factors, such as trade tariffs, higher inflation, UK borrowing costs, and the war in Ukraine, reports the BBC. A source told the publication: “Clearly the world has changed a lot since the autumn Budget. People are watching that change happen before their eyes.
“The Office for Budget Responsibility will reflect that changing world in its forecasts later this month and a changing world will be a core feature of the chancellor’s response later this month.” The plans are believed to involve “politically painful” cuts to welfare, as Work and Pensions Secretary Liz Kendall has been drawing up reforms to reduce the number of people on health-related benefits and get them back into work.
She told a Cabinet meeting this week there are 2.8 million people out of work due to ill-health and one in eight young people not in education, training or employment. Last year, the Government spent £65billion on sickness benefits – a 25 percent increase since the year before the pandemic. It is forecast to hit £100billion before the next general election, writes the BBC.
Insiders insisted that attempts to reduce the welfare bill would come with support to get more people back into work. Justice Secretary Shabana Mahmood argued that there was a “moral case” for cutting the size of the sickness and disability benefits bill.
Speaking to BBC Radio 4’s Today, she said: “There is a moral case here for making sure that people who can work are able to work and there’s a practical point here as well, because our current situation is unsustainable.”
The Prime Minister’s official spokesman said economic growth was the Government’s top priority, but continued: “One of the huge blockages to growth is the broken welfare system, which we inherited, which is draining our workforce by pushing people out of work and consigning them to a life dependent on welfare instead.”
However, critics have voiced the impact cuts will have on the poorest, as Fire Brigades Union general secretary Steve Wright said: “Hard pressed families must not be made to pay the price of nearly a decade-and-a-half of Tory mismanagement of the economy. The Chancellor must use her Spring statement to tax the rich to properly fund public services and increase pay. Rachel Reeves must not become Labour’s ‘Austerity Chancellor’.”
PCS general secretary Fran Heathcote said: “Cutting civil service jobs will damage public service and cutting disability benefits will condemn people to poverty.” While chief executive of the Resolution Foundation, Ruth Curtice, stated the Chancellor should consider tax rises instead of welfare cuts.
She said: “I wouldn’t borrow more but I do think there’s an argument not to cut welfare spending but to look at taxes instead.” With just weeks to go until the Spring Statement, we want to know if you agree with plans to cut welfare costs. Vote in our poll HERE to have your say.
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