Politics
Chess fanatic playing Labour’s first big gambit
“Serious” and “determined” are words often used to describe Rachel Reeves, the UK’s first female chancellor.
But colleagues and friends have suggested the Labour MP’s public persona does not reflect her human side, with a loud laugh and deep love of Beyoncé tracks.
In her maiden speech in the House of Commons in 2010, she vowed to fight for “jobs, growth and prosperity” – likely centrepieces of Labour’s first Budget in nearly 15 years, on 30 October.
So who is Reeves, and how is she addressing the economic and financial challenges the country faces?
Reeves was born in south-east London in 1979, just months before Margaret Thatcher became prime minister at a time of immense social and economic change.
She has previously told the BBC her mother would tick off items on a bank statement against receipts while sitting at the kitchen table: “We weren’t poor, but we didn’t have money to waste.”
Her parents separated when she was at primary school, and she and younger sister Ellie, also a Labour MP, were shuttled between separate homes.
During the school holidays, the sisters would spend time with their grandparents in the Northamptonshire town of Kettering.
They would be taken to do the rounds of relatives’ houses, who would give them a 20p or 50p piece each. At the end of their week, they were taken to the local toy shop to choose their goodies. While Ellie would spend all her cash, the young Rachel would allow herself a smaller treat and save most of the money.
Decades later, Chancellor Reeves would say that kind of restraint defines her, and she has very much modelled herself on Gordon Brown’s “prudence” in the lead-up to Labour’s 1997 election win.
Chess talent
Reeves played chess from an early age, with her father teaching her the key moves. She became a national under-14 champion, and would “quietly thrash” any boys who might think they were in for an easy game, according to Ellie.
She has credited chess with teaching her “to think ahead, to plan a strategy”.
A keen flute player, she took her music GCSE a year early at Beckenham’s Cator Park School for Girls, a comprehensive, and would go on to gain four A grades at A-level.
Seeing the extent of cuts at her school, where the library had been turned into a classroom and the sixth form consisted of “two pre-fab huts in the playground”, she has said she was politicised by her own experience of public services. At the age of 16, she joined the Labour Party.
She went on to study Philosophy, Politics and Economics at Oxford University. As a student, she would host others before college discos, blasting out Destiny’s Child songs and dressing up in her room.
Rachel Reeves: The basics
Age: 45
Place of birth: Lewisham, south-east London
Education: New College, Oxford and the London School of Economics
Family: Married to Nicholas Joicey, a senior civil servant and former speechwriter to Gordon Brown during his time as chancellor. They have two children. Her sister is Labour Party chair Ellie Reeves.
Parliamentary constituency: Leeds West and Pudsey
After graduating, Reeves took on a role as an economist at the Bank of England.
She worked on the central bank’s Japan desk, looking at the country’s attempts to come out of stagnation in the 1990s.
During a secondment to the UK embassy in Washington, she met her future husband Nicholas Joicey, who had spent time as a film critic for newspapers and as a speechwriter to then-Chancellor Gordon Brown.
The path to Parliament was not an easy one though. There were two failed campaigns for the former seat of Bromley and Chislehurst, typically safe for the Conservatives.
Before becoming MP for Leeds West in 2010, Reeves moved to the city and spent time working there for the retail arm of Halifax Bank of Scotland.
She once had an interview for a job at investment bank Goldman Sachs, but turned it down. She said: “I could have been a lot richer.”
Entering Parliament, an early mentor on economic policy was Alistair Darling – the last Labour chancellor, during the financial crisis.
At his funeral last December, Reeves spoke fondly of enjoying lasagne and red wine with him and his wife.
She quickly rose up the party’s ranks, shadowing roles at the Treasury, Work and Pensions, and the Cabinet Office.
Brushes with controversy
While a friend has described her as politically “as hard as nails”, Reeves’ time in Westminster has not been without controversy.
She was accused of “utter hypocrisy” for paying students working in her offices only expenses, rather than a salary. She argued the students were on work placements and getting maintenance support.
Throughout Jeremy Corbyn’s four and a half years as Labour leader, she remained on the backbenches because she felt she could not endorse his policies. Called a “Red Tory” by some in the party, she described this as a “very unpleasant period” in an interview with the BBC’s Nick Robinson.
A former editor of the BBC’s Newsnight programme was forced to issue a written apology to Reeves after calling her “boring snoring” on social media in a post that was meant to be a private message.
While she said the incident was “deeply humiliating”, her key objective after Sir Keir Starmer appointed her shadow chancellor was to portray Labour as a steady, pro-business hand on the economy.
Last October, she admitted she “should have done better” after it emerged some passages in her book, The Women Who Made Modern Economics, had been lifted from other sources without acknowledgment.
She told the BBC some sentences “were not properly referenced” and this would be corrected in future reprints. The Conservatives mockingly called her a “copy and paste shadow chancellor”.
Following Labour’s landslide victory in July’s general election, Reeves was confirmed as the first woman to hold the office of chancellor in its 800-year history.
That was “beyond what a girl like me, from the ordinary background that I came from, could have ever dreamed of,” she recently told BBC Radio 5 Live’s Matt Chorley.
Among a number of early government announcements, she cancelled several infrastructure projects and approved a series of public sector pay rises.
But Reeves will not be delivering her first Budget until the end of October, nearly four months after arriving at the Treasury.
‘Black hole’
Labour argued the time was needed to allow the independent Office for Budget Responsibility (OBR) to properly assess the state of the UK economy. In 2022, Conservative Prime Minister Liz Truss and Chancellor Kwasi Kwarteng had sidestepped OBR scrutiny of their disastrous mini-budget.
But critics said the Budget was the new government’s main lever of change, and that therefore leaving it so long after taking office was a political error.
During the election campaign, Reeves had predicted Labour would inherit the worst economic situation since 1945. In July, she said a spending audit had uncovered a £22bn “black hole” in the public finances left by the previous government.
The Conservatives cried foul and accused Labour of not telling voters the truth about its intention to put up taxes.
During that campaign, independent analysts such as the Institute for Fiscal Studies observed that ruling out increases in income tax, National Insurance and VAT would severely limit Reeves’ room for manoeuvre in the Treasury.
Government sources have told the BBC the chancellor is now looking for tax rises and spending cuts totalling £40bn in the Budget.
One change she announced early was the scrapping of winter fuel payments for millions of pensioners not receiving means-tested benefits. It has proved highly controversial.
Another move unveiled ahead of the Budget was to change the way government debt is measured, to free up billions of pounds of extra investment in infrastructure projects such as roads, railways and hospitals.
Reeves is determined to remedy the UK’s long-term record of under-investment, setting up a £7bn national wealth fund to encourage private investment in green sectors and repeatedly emphasising the new government’s pro-business credentials.
As she prepares to deliver Labour’s first Budget since 2010, the chancellor has revealed she often chats to a number of senior figures.
“I speak to Gordon [Brown] regularly – I also speak to Tony Blair regularly,” she told Matt Chorley.
Despite their political differences, she also maintains a “good relationship” with Conservative predecessor Jeremy Hunt, she said.
“I may not be particularly impressed with the state of the public finances that he left me, but I do recognise that after Kwasi Kwarteng, he had a tough job to do as well.”
Reeves is politically close to Sir Keir, and also revealed they speak at least once a day, wherever the prime minister is in the world.
But there is a warning from a Labour veteran of the Blair-Brown era, former cabinet minister Lord Blunkett, that she needs to offer the public more hope and less gloom.
He told the BBC Reeves had “been left a terrible hand”, but that “post-Covid, we are a tired nation”, so “more miserableness won’t do”.
He also cautioned that this Budget would probably define the next five years, and that if Labour was going to win a second term, “you have to keep a degree of popularity”. As the Conservatives had found out, he added, “once you’ve lost it, it takes a very very long time to pull it back”.
Politics
Many African kings opposed eradicating slavery
The government should “unequivocally reject” calls for the UK to pay reparations for its role in the slave trade, Tory leadership candidate Robert Jenrick has said.
He said calls for the UK to pay reparations were “based on false and misleading narratives about our past”.
Britain “worked harder than nearly any other country to eradicate the practice” in the 19th century, adding that the campaign against slavery was “opposed by many African kings”.
There have been attempts to get reparations discussed at a meeting of the 56 Commonwealth countries in Samoa.
Chancellor Rachel Reeves has already ruled out making payments, telling the BBC: “That’s not something that this government is doing.”
Prime Minister Sir Keir Starmer said the slave trade was “abhorrent” but that it would be better to focus on “today’s challenges” such as climate change.
Caribbean countries have been particularly keen to press the issue. Earlier this week, Bahamas foreign minister Frederick Mitchell told BBC Radio 4’s Today programme that reparations were not just about money but a matter of “respect, acknowledging the past was wrong and needs to be corrected”.
Kemi Badenoch, Jenrick’s opponent in the Tory leadership race, said the government was facing reparation demands because Labour politicians had “spent their time in opposition supporting these sort of fringe, unnecessary causes under the guise of decolonisation”.
“Now the British public are waking up to the reality of a Labour government that is ashamed of its own country – giving away the Chagos Islands, watering down Britain’s influence at the UN, and reducing our support for Israel in their fight against terror.
“If I am leader of the opposition I will ensure Keir Starmer is held to account for his deplorable actions.”
Reparations are actions that can be taken to amend for past wrongs. For example, in 2013, the UK government paid £19.9m to 5,000 elderly Kenyans who had been tortured by British colonial forces in the 1950s.
From the 16th century, the British government, along with other European countries, participated in the transatlantic slave trade.
It is estimated that between 1500 and 1800 around 12 -15 million people were trafficked from African countries to be used as enslaved labour in the Caribbean, North, Central and South America. Around two million died on the journey to the Americas.
Having been one of the big beneficiaries of the trade, Britain had a key role in ending the practice and abolished slavery in 1833.
As part of the policy, British plantation owners were paid £20m for the loss of their slaves, creating a debt the UK only finished paying off in 2015.
Addressing the Henry Jackson Society think tank in London, Jenrick said: “It was Britain that spent 1.8% of GDP between 1808 and 1867 on eradicating slavery – the most expensive moral foreign policy on human history.”
“It was a campaign in fact opposed by many African Kings.
“The West African squadron sacrificed their lives for liberty and freedom and it is high time that we recognise their contribution with a national memorial to honour them and everything that they did.”
The Royal Navy squadron was tasked with stopping vessels transporting slaves and was involved in freeing around 150,000 slaves in the 19th century.
Just as European nations were enriched themselves through the slave trade, some African slave sellers also profited from the practice.
Jenrick said calls for the UK to pay reparations were “based on false and misleading narratives about our past”.
Last year, a UN judge co-authored a report which estimated that the UK should pay £18.8tn for its involvement in slavery.
The report said the harm caused by the slave trade was “vast” adding: “Its repercussions resonate in the lives of descendants of the enslaved to this day.”
It also argues that descendants “even to this day” have lower incomes and poor health outcomes.
Historian Professor Sir Hilary Beckles told the report that slavery had led to the black population in the Caribbean experiencing high levels of diabetes, with Barbados and Jamaica “competing for the title of ‘Amputation Capital of the World.’”.
Politics
Keir Starmer struggles to define ‘working people’ tax pledge
Sir Keir Starmer has attempted to define who “working people” are, amid renewed scrutiny of his tax plans ahead of next week’s Budget.
Labour promised at the general election not to increase taxes on working people – but it is looking to raise some taxes to fund public services.
This could include increases in tax on the sale of assets, such as shares and property, a freeze on income tax thresholds and changes to inheritance tax.
Sir Keir has repeatedly been asked whether “working people” would be hit by these changes.
He insists they won’t but has struggled to offer a clear definition of what counts as a working person in the government’s eyes.
In an interview during a Commonwealth leaders’ summit, the prime minister was asked whether those who work, but get additional income from assets such as shares or property, would count as working people.
He replied that they “wouldn’t come within my definition” – but warned against making “assumptions” about what that meant for tax policy.
He said he thought of a working person as someone who “goes out and earns their living, usually paid in a sort of monthly cheque” and who can’t “write a cheque to get out of difficulties”.
Speaking afterwards, his spokesman sought to clarify that those with a “small amount of savings” could still be defined as working people.
This could include cash savings, or stocks and shares in a tax-free Individual Savings Accounts (ISA), he suggested.
But ministers have been reluctant to translate these comments into numbers.
‘Hypotheticals’
The prime minister accepted that his own definition was “broad”.
Those people he had in mind, he added, were those who were “doing alright” but had an “anxiety in the bottom of their stomach” about making ends meet if something unexpected happened to their family.
The issue has taken on a central political importance ahead of next Wednesday’s Budget, Labour’s first since 2010, amid a row over whether the party is sticking to promises it made in its election manifesto.
During a BBC interview back in the UK, Treasury minister James Murray was asked repeatedly to give a more precise answer.
When asked whether someone who owned shares or sold a business could be a working person, he said he would not “get into too many hypotheticals”.
As well as the broad pledge not to raise taxes for working people, Labour’s manifesto specifically ruled out raising rates of income tax, along with National Insurance and Value Added Tax (VAT).
But ministers have not ruled out continuing to freeze income tax thresholds beyond 2028, a policy they inherited from the Conservatives, dragging more people into higher bands over time as wages rise with inflation.
And they have also not ruled out making employers pay National Insurance on their contributions to workers’ pension pots, which the Conservatives have branded a “tax on work” that will indirectly hit workers.
Labour peer Lord Blunkett, a cabinet minister in the Blair government, said the “logical outcome” of the move was that “employers will pay less”.
He also cautioned that he was unsure of the government’s definition of a working person, adding: “We’ve got to find a different phraseology”.
Other rumoured tax rises include to capital gains tax, which is paid on profits made by selling assets including shares and property other than a main home.
The government is also planning to increase the amount of money it raises in inheritance tax, which is paid after around 4% of deaths.
Multiple changes to the tax, which currently includes several exemptions and reliefs, are under consideration.
Politics
Minister put on spot over ‘working people’ definition
Treasury minister James Murray was asked to define “working people” amid speculation that the chancellor could raise some taxes in the Budget next week.
Murray said the government will keep its manifesto promise to “protect working people”, but he did not answer directly when asked if that group includes landlords, people who own shares or who sell a business.
“Working people are people who go out to work for their income,” he told presenter Nick Robinson on BBC Radio 4’s Today programme on Friday morning.
Asked for a fifth time if he would count landlords among that group, Murray said: “I’m not going to get into too many hypotheticals here, Nick.”
Politics
Starmer confronts slavery reparations and says future should not be ‘in shadow of past’ in Commonwealth address – UK politics live | UK news
Starmer says he understands ‘strength of feeling’ about reparatory justice but future should not be ‘in shadow of past’
Eleni Courea
Eleni Courea reporting from Apia:
Keir Starmer has said he understands the “strength of feeling” in the Commonwealth about reparatory justice but that countries should work together to ensure their future is “not in the shadow of the past, but is illuminated by it”.
Speaking in an executive session of the Commonwealth heads of government meeting (Chogm) hosted in Samoa, the prime minister conceded that the Commonwealth had to “acknowledge our shared history – especially when it’s hard”.
Downing Street has firmly ruled out paying reparations to its former colonies and said it’s not on the agenda for the summit, but Caribbean countries have been pushing for them to be mentioned in the communique.
“I understand the strength of feeling here and that there are some calls to face up to the harms and injustices of the past through reparatory justice,” Starmer told leaders.
“The UK believes the most effective way to maintain a spirit of respect and dignity is by working together to make sure the future is not in the shadow of the past, but is illuminated by it.”
The Guardian reported this week that the UK was open to discussing non-cash forms of reparatory justice such as reforming financial institutions
Starmer had been due to hold a bilateral meeting on Friday with the president of Ghana Nana Akufo-Addo, who has spoken in favour of reparations in the past, but it was called off because of timing constraints.
Key events
Keir Starmer does not think all owners of stocks and shares fall outside his definition of “working people”, Downing Street has signalled, according to the PA news agency.
The prime minister had suggested asset owners would not fall within his conception of what a working person is. The government has been asked repeatedly to define this term, in a bid to establish which taxes may rise in the budget. Labour’s manifesto said the party would not increase taxes on working people, including VAT, national insurance, and income tax.
During a broadcast interview at a Commonwealth summit in Samoa, Starmer told Sky News that he does not consider people who have an income from assets such as shares of property to be working people. “They wouldn’t come within my definition,” he said.
The hint at who falls outside the scope of Starmer’s definition could point to where tax rises might come from in the budget. Among the levies which are reportedly under consideration for a hike are capital gains tax, inheritance tax, and fuel duty, reports the PA news agency.
In a partial climbdown on Starmer’s position, Downing Street later clarified that people who hold a small amount of savings in stocks and shares still count as working people. The prime minister’s official spokesperson said Starmer meant someone who primarily gets their income from assets in his interview.
The PA news agency reports that on Friday morning, a Treasury minister said it is “important to focus on” where people are getting their money from in relation to the debate over the “working people” definition.
James Murray told Sky News that “a working person is someone who goes out to work and who gets their income from work”.
Pushed further on whether a working person could also get income from shares or property, Murray added: We’re talking about where people get their money from, and so working people get their money from going out to work. And it’s that money that we’re talking about in terms of those commitments we made around income tax, around national insurance.
That’s what’s important to focus on, where people are getting their money from, getting their money from going out to work.”
Eleni Courea Eleni Courea reporting from Apia:
Keir Starmer has said he understands the “strength of feeling” in the Commonwealth about reparatory justice but that countries should work together to ensure their future is “not in the shadow of the past, but is illuminated by it”.
Speaking in an executive session of the Commonwealth heads of government meeting (Chogm) hosted in Samoa, the prime minister conceded that the Commonwealth had to “acknowledge our shared history – especially when it’s hard”.
Downing Street has firmly ruled out paying reparations to its former colonies and said it’s not on the agenda for the summit, but Caribbean countries have been pushing for them to be mentioned in the communique. “I understand the strength of feeling here and that there are some calls to face up to the harms and injustices of the past through reparatory justice,” Starmer told leaders.
“The UK believes the most effective way to maintain a spirit of respect and dignity is by working together to make sure the future is not in the shadow of the past, but is illuminated by it.”
The Guardian reported this week that the UK was open to discussing non-cash forms of reparatory justice such as reforming financial institutions
Starmer had been due to hold a bilateral meeting on Friday with the president of Ghana Nana Akufo-Addo, who has spoken in favour of reparations in the past, but it was called off because of timing constraints.
Keir Starmer has confronted calls for the UK to pay reparations for its historical part in the slave trade while surrounded by Commonwealth leaders.
Speaking at an executive session of a Commonwealth summit in Samoa, the prime minister said it was important to acknowledge a “hard” shared history, and that he understood the “strength of feeling” about reparations, reports the PA news agency.
Flanked by leaders from Uganda and Tanzania, Starmer said he wanted to work “together to make sure the future is not in the shadow of the past”, and promised to host a UK-Caribbean forum with leaders of the nations most affected by slavery’s legacy. The prime minister has insisted reparations are not on the table for the Commonwealth summit, even as leaders from Caribbean and African member states have called for discussions on the issue.
The UK has conceded that the issue of reparations could be included in a document due to be signed off at the Commonwealth heads of government meeting this week.
The PA news agency reports that sources accept that there could be a reference to reparatory justice in the communique, but officials stressed that this would not necessarily mean any change in the UK’s policy position.
More on that in a moment, but first, here is an update of the latest developments in UK politics: Keir Starmer does not think all owners of stocks and shares fall outside his definition of “working people”, Downing Street has signalled. The prime minister had suggested asset owners would not fall within his conception of what a working person is. The government has been asked repeatedly to define this term, in a bid to establish which taxes may rise in the budget.
Downing Street is blocking moves to include a ban on smoking outdoors in the upcoming Tobacco and Vapes bill amid fierce opposition by the hospitality trade. No 10 officials privately believe that banning people from lighting up in pub gardens is “an unserious” policy and is not backed by good evidence showing that it harms non-smokers.
A Treasury minister has said he does not accept the idea that changes to the fiscal rules could “punish families with mortgages”, as was suggested by former chancellor Jeremy Hunt. When asked on Times Radio whether he accepted that, James Murray, the exchequer secretary to the Treasury said “well, no.”
Rachel Reeves will pledge to reverse huge cuts in public investment in her budget next week after she confirmed that rules limiting her spending power will be overhauled to enable the government to release as much as £50bn for infrastructure spending.
Businesses that import critical minerals to the UK will be given access to state-backed loans in a move to counter China’s dominance in the market. The chancellor is expected to announce extra government support to encourage the import of critical minerals such as lithium, graphite and cobalt in her budget next week.
The value of the UK’s private healthcare market rose to a record £12.4bn last year as long NHS waiting lists fuelled demand from individuals and the health service paid for nearly £3.5bn of procedures to help ease the care backlog.
A group that emerged out of a faction of the Conservative party has become a forum for Britain’s splintered far right. A private conference hosted earlier this month by the Traditional Britain Group (TBG) was attended by figures from the Homeland party, an extreme nationalist group, as well as rivals from other groups such as Patriotic Alternative.
Starmer says he understands ‘strength of feeling’ about reparatory justice but future should not be ‘in shadow of past’
Starmer confronts slavery reparations calls in address to Commonwealth leaders
Politics
London mayor halves transport funding request from Budget
London mayor Sadiq Khan has halved – compared to last year – the minimum amount of money he is asking from the government to fund major transport projects.
The Labour mayor had asked the last Tory government in 2023 for a minimum of £569m to pay for a range of infrastructure upgrades, and complained after receiving only £250m.
Khan told the Local Democracy Reporting Service he now believes it would count as “a win” to receive “anything more than £250m” from the Labour government.
City Hall Tories said the mayor was “watering down” what they claim were “exaggerated financial demands”.
Khan said the reduced funding demand was due to the “£22bn black hole” in public finances cited by the chancellor.
Ahead of the last government’s autumn statement in November last year, Khan had said in a letter to then-Chancellor Jeremy Hunt that Transport for London (TfL) “needs £569m in capital support for 2024/25 to support critical network upgrades and investment in critical road assets”.
He added: “Failure to secure this funding would put vital upgrades at risk and be detrimental to long-term infrastructure investment in the capital’s transport network, with consequential negative impacts on the wider UK economy.”
However, asked earlier this week what he will be requesting from the new government, Khan said: “I’ll be asking for north of £250m. The £250m we got last year was before the £22bn black hole in the government’s year-to-year expenditure.”
The chancellor’s claim that she had inherited a £22bn gap in the public finances was met with ridicule by her Conservative opponents.
Her predecessor, Hunt, said she would “fool absolutely no one” and accused her of a “shameless attempt” to lay the groundwork for tax rises in her upcoming Budget.
But Khan insisted Reeves had been forced to find ways to “make ends meet”, and said, in that context: “I’ll ask for as much as I can get. But what I’m saying is, a win is getting anything more than £250m.”
He said the “real prize” will be at the spring spending review where he hoped to secure a multi-year deal for funding after the 2025/26 financial year.
Neil Garratt, leader of City Hall Conservatives said: “Last year the mayor said that £500m was the absolute minimum to stop TfL collapsing, but this year he claims that anything ‘north of £250m’ is a win.”
“Consistently under Khan’s mayoralty he made exaggerated financial demands, which made it impossible for a Conservative government to work constructively with him.
“Now that he has a Labour government he can’t get away with that; he’s forced to be honest. What other demands are going to be watered down in the next few years?”
Politics
There’s talk of tax and fiscal rules, but if Rachel Reeves’s budget doesn’t help ordinary people, what’s the point? | John McDonnell
With the constant drip of stories about possible tax hikes or reinterpretations of the fiscal rules, it’s easy to forget the underlying purpose of any budget. There are two fundamental but straightforward questions to guide a chancellor’s thinking. The first is what society do you want to create? The second is what are the economic measures that will aid its creation?
Labour’s historic mission has been to ensure a good standard of living through decent wages, access to health services and education not dependent on what you could pay, and housing you could afford. But above all else Labour pledged to build a society where poverty would no longer exist by creating a safety net to ensure the most vulnerable, children and unemployed, sick, elderly or disabled people, were no longer at risk.
To achieve all this, the postwar Labour government introduced the most progressive, civilising innovation in our country’s history, the welfare state, funded by a redistributive system of taxation. Any budget under a Labour government since then should be measured on its contribution to achieving this mission.
Undoubtedly, the 14 years of austerity under the Conservatives presents the incoming government with a huge but not insuperable challenge. Fourteen million people, including 4 million children, now live in poverty. Wages have stagnated since the banking crash, while low-paid insecure employment has spread like an epidemic. Year after year of underfunding has pushed our public services into crisis.
Nevertheless, we are an immensely wealthy country, the sixth-largest economy in the world. The debt-to-GDP ratio is now just under 100%, but Clement Attlee carried a 250% debt to GDP and still constructed the welfare state. In fact, 100% is about average historically.
The question that this government must go some way to answering is how we harness the economic resources and capacity to rebuild our country and the welfare state. Despite all the pre-budget handwringing drama, the solutions are readily available. The reinterpretation of the fiscal rule on debt, as first proposed in Labour’s manifesto in 2019, will open up the opportunity for large-scale public infrastructure investment with sufficient guardrails at hand to reassure the bond markets.
There is also a wide-ranging vista of tax reforms based upon the principle of the broadest shoulders bearing the heaviest burden that cumulatively would provide the resources to fill budget gaps and enable the rebuilding of our public services. This is even before the inevitable debate about how wealth and land are taxed fairly. If fully developed, the government’s employment rights bill also has the potential of raising wage levels by restoring the balance of power at work.
This budget therefore has the potential of being the much needed, radical break from the dark years of austerity. However, it will be totally undermined if the government goes anywhere near policies that maintain the Conservatives’ assault on the poorest in our society.
It has been reported that the chancellor, Rachel Reeves, aims to press ahead with plans to cut the welfare benefits budget by up to £3bn, in part by adhering to the previous government’s plans to make the work capability assessment (WCA) harder for disabled people to qualify for support, or to introduce its own reforms to the WCA but with the same savings target.
According to the Resolution Foundation, 450,000 people whose health prevents them from working would lose £4,900 a year. Nearly half of families that receive incapacity benefits come from the poorest 30% of households. Scope, the disability charity, has warned that thousands of disabled people are “feeling anxious and confused”. A group of anti-poverty, health and disability charities, including Z2K, Child Poverty Action, Mind and the Joseph Roundtree Foundation, called on Liz Kendall, the work and pensions secretary, to scrap the plans.
According to activists, there have been contradictory briefings that the WCA changes both would and would not be part of the Department for Work and Pensions’ savings package. A judicial review is also currently scheduled to be heard on 11 December.
With a record 2.8 million people out of work through ill health, the argument has resurfaced that benefits cuts will incentivise sick and disabled people to move into employment, but the Office for Budget Responsibility found only about 3% (15,400) of the affected claimants would move into work, with the rest suffering heavy financial penalties.
It is no coincidence that the graphs showing the increase in people unable to work and the growth in the NHS waiting list for treatment almost coincide. Disability benefits cuts will not solve the problem of labour shortages. They will increase disability poverty rates and lead to greater pressures on the NHS, social-care services and the mental-health system, placing additional long-term costs on our society.
If the government has learned anything from the angry reaction to the cuts to the winter fuel allowance that so blemished its early days in power, it must be not to spoil the potential of a good budget by acting against the very principles of the welfare state that Labour was so proud to found.
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