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Reading: Rachel Reeves says welfare system ‘letting individuals down’ forward of anticipated cuts
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Michigan Post > Blog > Politics > Rachel Reeves says welfare system ‘letting individuals down’ forward of anticipated cuts
Politics

Rachel Reeves says welfare system ‘letting individuals down’ forward of anticipated cuts

By Editorial Board Published March 6, 2025 6 Min Read
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Rachel Reeves says welfare system ‘letting individuals down’ forward of anticipated cuts

Rachel Reeves has stated the welfare system is “letting down taxpayers”, whereas she once more dedicated to reaching 2.5% in defence spending by 2027 because of the “enormity of the situation” dealing with European safety.

The chancellor advised Sky’s political editor Beth Rigby on the Electoral Dysfunction podcast, out on Friday, that there must be “better value for money” for what individuals pay in taxes.

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It comes forward of the spring assertion on 26 March, through which Ms Reeves is anticipated to make billions of kilos of cuts together with to the advantages invoice.

The chancellor stated there must be welfare reform as a result of the system is “letting down taxpayers because it’s costing too much”.

“It’s letting down our economy because there’s too many people trapped on out-of-work benefits, and it’s letting down the people who are recipients of benefits because they are trapped on benefits rather than actively supported back into work,” she stated.

Pressed that she has to search out financial savings to fulfill her self-imposed fiscal guidelines, Ms Reeves stated she was “not going to provide a running commentary” on what could possibly be within the spring assertion however insisted the reforms had been crucial no matter what could possibly be within the upcoming forecast from the Workplace for Price range Duty (OBR).

She stated there are 1,000,000 younger individuals not in training, employment or coaching and “the majority of those people should be working”.

“Under the plans that we’re going to bring in, they will be working and crucially, they will be given support to get back to work,” she added.

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The spring assertion can be in response to the most recent updates from the OBR, which is required to do a forecast twice a 12 months on the economic system and public funds.

The chancellor beforehand dedicated to only one single main fiscal occasion every year to present stability and certainty on upcoming tax modifications, not like earlier governments that sometimes delivered budgets within the spring and autumn.

Nevertheless, the poor financial local weather since her October 2024 price range is forcing her hand, with inflation hitting a 10-month excessive of three% in January, a pointy rise in authorities bond yields, and progress has not been as excessive as anticipated.

This has eaten into the £10bn fiscal headroom Ms Reeves was beforehand estimated to have – a determine the Treasury desires to keep up.

Ms Reeves insisted her spring assertion wouldn’t be one other package deal of tax rises, saying the October price range “was a sort of a once in a generation, once in a parliament type budget”.

Learn Extra:Poundland up on the market as price range tax hike loomsJobcentre reforms at coronary heart of Labour’s plan to ‘get Britain working’

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1:19

Is Rachel Reeves about to chop welfare?

She added that Labour dedicated in its manifesto to not improve earnings tax, VAT or nationwide insurance coverage and “we’re not going to renege on that”.

‘World has modified’

Elsewhere within the podcast, Ms Reeves defended the federal government’s choice to chop overseas assist to fund a rise in defence spending.

Labour’s manifesto dedicated to restoring improvement spending on the degree of 0.7% of gross nationwide earnings “as soon as fiscal circumstances allow”.

Nevertheless round £6bn per 12 months will now be taken out of the help price range and transferred over to pay for defence.

That quantities to a discount in assist spending from 0.5% of GDP to 0.3%.

Ms Reeves stated the choice needed to be made to fund one other manifesto pledge – which was to boost defence spending to 2.5% of GPD, up from the two.3% it’s at now.

“The decision was made not just to get to 2.5%, but to get to 2.5% in 2027,” she stated.

“I think that was the most significant bit, really of the announcement.

“Everybody knew we had been going to get to 2.5% on this parliament. That was a dedication from us in our manifesto that we’d get there, however we’re truly going to get there in two years as a result of we recognise that the world has modified the enormity of the state of affairs.”

Hearken to the total interview with Rachel Reeves on the Electoral Dysfunction podcast, out Friday at 5am.

TAGGED:aheadcutsexpectedLettingpeopleRachelReevessystemWelfare
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