Rachel Reeves has said the welfare system is “letting down taxpayers”, while she again committed to reaching 2.5% in defence spending by 2027 due to the “enormity of the situation” facing European security.
The chancellor told Sky’s political editor Beth Rigby on the Electoral Dysfunction podcast, out on Friday, that there needs to be “better value for money” for what people pay in taxes.
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It comes ahead of the spring statement on 26 March, in which Ms Reeves is expected to make billions of pounds of cuts including to the benefits bill.
The chancellor said there needs to be welfare reform because 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 said.
Pressed that she has to find savings to meet her self-imposed fiscal rules, Ms Reeves said she was “not going to provide a running commentary” on what could be in the spring statement but insisted the reforms were necessary regardless of what could be in the upcoming forecast from the Office for Budget Responsibility (OBR).
She said there are a million young people not in education, employment or training 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 statement will be in response to the latest updates from the OBR, which is required to do a forecast twice a year on the economy and public finances.
The chancellor previously committed to just one single major fiscal event each year to give stability and certainty on upcoming tax…
