Reeves: Welfare cannot be left ‘untouched’ in Budget
Rachel Reeves has said she cannot leave welfare “untouched” because it would mean putting up people’s taxes, ahead of her Budget in November.
The Chancellor has already acknowledged she is looking at potential tax rises and spending cuts and signalled that taxes on the wealthy will feature in her November 26 statement.
She said welfare reforms still need to happen, in comments during a trip to Washington DC for the annual meetings of the International Monetary Fund (IMF).
An attempt to push through cuts to benefits earlier this year led to an embarrassing last-minute U-turn for the Government.
‘Untouched’
The Chancellor argued that MPs who previously voted against changes “recognise the welfare system is not working”, in an interview with Channel 4.
She said: “You know we’ve now committed to doing reform in a different way, but we can’t leave welfare untouched.
“We can’t get to the end of this Parliamentary session and I’ve done nothing, basically.
“Because if more and more of our money that we spend as a government is spent on welfare, you’ve got less for the NHS, you’ve got less on schools and you have to put more on people’s taxes.”
The Chancellor will have to fill a black hole estimated at up to £50 billion by some economists in her statement next month.
Headroom
The Institute for Fiscal Studies (IFS) said it expected the Chancellor would need to find at least £22 billion to restore the £10 billion of headroom she previously left herself against her self-imposed debt rules.
That does not take into account the cost of widely expected announcements on abolishing the two-child benefit cap and maintaining the freeze on fuel duty.
The IFS urged her to be “bold” and create a bigger buffer.
There have also been reports that the Chancellor is considering removing tax breaks for the Motability scheme, which allows people with serious mobility problems to exchange their personal independence payment, often along with an additional up-front payment, for a lease on a car.
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Cuts! Cuts! Cuts!
To Labour’s membership numbers 😀
The so called party of the working class are about to tax the ‘working people’ a lot harder!
They could impose an asset tax on the ultra rich. 1% on people worth £10mil + and 2% on people worth £1bn or more.
That’ll raise up to £21bn, from people who make c£200,000.00 per day in passive income (just for breathing because of the value of their wealth).
But no, Labour thinks it’s us that must shoulder more of the burden.
For shame.
Very true.
It should br YOUR first concern!
Yeah, all those people on welfare have never had it so good! Only fair they are treated harshly. Time those cold pensioners had more to whinge about! They eat too much anyway. And disabled people should be working a full week and using public transport even if they say they cannot. It’s a good thing that Rachel from Accounts has such a perfectly clear view of macroeconomics (er, not as found in my textbooks though…) and knows exactly where the fat to be trimmed is. Her PPE approach is shurely the right one, as Thatcher wonderfully pioneered. And it has… Read more »
Perhaps ordinary hardworking people could be more involved in deciding who in their community gets government support and who doesn’t. I’d like to know what they think about millionaires getting state pension benefits funded by their taxes.
I see the broadest shoulders are the poor and vulnerable again. Its no wonder people have lost faith in the main parties. Maybe if she insisted that large companies paid people better and gave more working hours to employees. The in work benefits paid to them would be drastically reduced. The largest part of the benefits bill is paid to people who are actually in work. We subsidise the wage bills of these large companies. Although this shouldn’t come as a suprise to anyone when many of the cabinet, including Reeves admire Thatcher so much and even Reeves state when… Read more »
Taking money out of the pockets of people who’ll spend it in the local economy is also anti-growth. Perhaps they can find other ways to let people on low wages keep more of their money to spend in the local economy.
Reeves and her gang may have done a U-turn regarding pensioner heating and welfare cuts but she won’t be happy until she gets her way. Allegedly she is also looking at how she can rob people’s savings, PIP, Motability allowance and private pensions. If I had my time again I would spend every penny enjoying myself holidaying, instead of striving to pay into a private pension and going without because of the cost.