Thursday, March 06, 2025
Labour plan their own austerity measures
The paper quotes Treasury sources as saying that several factors have impacted plans presented under Reeves’ October budget, with increased borrowing costs and weak economic growth likely to require further spending cuts in order to meet commitments on managing the public finances:
Curbing the cost of welfare and a drive for greater efficiency across Whitehall are expected to contribute the bulk of the savings.
Chancellor Rachel Reeves is likely to cut the cost of welfare to help manage public finances (Yui Mok/PA) (PA Wire) ITV’s deputy political editor Anushka Asthana reports senior sources across government have told her they have been asked to identify the 20 per cent of spending within their departments that they see as lowest priority.
The hosts of ITV News Talking Politics podcast also wrote that the Department for Work and Pensions was drawing up plans to overhaul disability and health benefits to significantly reduce the number of people who are judged as unable to work.
That will mean that far fewer disabled people will receive higher benefit levels, and many more will be expected to search for work.
Work and pensions secretary Liz Kendall, who is expected to set out welfare reforms within weeks, told cabinet colleagues on Tuesday there are 2.8 million people not in work due to ill-health and one in eight young people not in education, training or employment.
She told them this is “holding back the economy” and is “bad for people’s wellbeing and health”, with the sickness and disability bill for working-age people rising by £20 billion since the pandemic and forecast to hit £70 billion over the next five years.
A Health and Disability Green Paper will set out plans to supports those who can work back into jobs, rather than write them off, she said.
So all the cuts that Labour condemned the previous governments for implementing are now on their own agenda. The need to rearm is of course important, but if Germany can relax their fiscal rules to do so, why can't we follow suit?
