Chancellor Reeves to Announce New Welfare Cuts Amid Revised Savings Forecast
March 26, 2025
Despite initial concerns among some ministers, the Cabinet has united in support of reforms aimed at addressing the welfare system's shortcomings inherited from the previous administration.
The economic slowdown has been attributed to global uncertainties, including the possibility of Donald Trump's return to the White House, high interest rates, and persistent inflation.
Reeves positions herself as a pragmatic politician focused on economic credibility, balancing tax increases with spending cuts to address Labour's historical trust issues with the electorate.
Reeves has highlighted the potential benefits of increased defense spending, which aims to create jobs and enhance economic security across the UK, although this shift has raised alarms among some Labour backbenchers.
Darren Jones, the chief secretary to the Treasury, has emphasized the importance of accountability in public spending, pledging to review every penny of taxpayer money to secure the nation's financial future.
Drawing inspiration from U.S. economic policies, Reeves maintains communication with Treasury Secretary Janet Yellen, who encourages her to stay committed to her economic strategy despite challenges.
Reeves has underscored the necessity of an active government to navigate the significant changes in the current economic landscape.
Chancellor Rachel Reeves is poised to announce additional welfare cuts in her upcoming spring statement, following the Office for Budget Responsibility's (OBR) revised estimate that previous reforms will yield savings of only £3.4 billion, down from an anticipated £5 billion.
The Daily Mail has advised Reeves against attributing economic challenges solely to global events, reflecting the public's ongoing concern about domestic economic management.
Amid sluggish economic growth, Reeves plans to express pride in her government's achievements over the past nine months, while also acknowledging the ongoing challenges.
Economists are warning that further tax increases may be necessary in the autumn budget if economic conditions do not improve, particularly in light of potential tariffs from U.S. President Donald Trump.
In a recent interview, Reeves asserted the importance of accountability in public spending, emphasizing that all policies and expenditures will undergo proper scrutiny.
Summary based on 137 sources
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Sources

BBC News • Mar 24, 2025
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