Chancellor Rachel Reeves has indicated plans for another attempt at welfare system reform, despite the government's previous effort to save £5bn ending in what she described as "inglorious failure."
Budget Build-Up and Welfare Reform Hint
In an opinion piece for The Sunday Times, the Chancellor sought to reaffirm her commitment to fiscal discipline ahead of Wednesday's budget. She emphasised that increasing public debt is not a Labour virtue and stated her focus would be on controlling inflation and addressing the cost of living crisis.
Ms Reeves specifically highlighted that controlling public spending "will require us to reform our welfare system too," signalling a renewed push for changes that previously sparked significant rebellion within her own party.
The Two-Child Benefit Cap Dilemma
Transport Secretary Heidi Alexander, appearing on Sky News' Sunday Morning with Trevor Phillips, strongly hinted that the controversial two-child benefit cap might be scrapped. While technically refusing to confirm the reports, she made an impassioned case for tackling child poverty, describing it as being "in the DNA of the Labour Party."
Scrapping the cap is estimated to cost between £3bn and £4bn, according to government assessments. Charities have consistently argued that removing the cap would be the single most cost-effective measure to reduce child poverty in the UK.
Political Challenges and Internal Tensions
The Chancellor faces an uphill battle with the party's increasingly rebellious backbenchers, who previously forced a retreat on welfare reforms. With Pat MacFadden now installed as the new Secretary of State at the Department of Work and Pensions, the government appears to be preparing for another difficult negotiation.
Shadow Chancellor Sir Mel Stride expressed scepticism about Labour's ability to pass welfare cuts, challenging Ms Reeves to "stand up and explain how she is going to control public spending, particularly welfare" without breaking promises or raising taxes.
The authority of both the Prime Minister and Chancellor has become significantly shakier following an autumn of difficult headlines, including the accidental release of foreign prisoners and controversies surrounding Angela Rayner's stamp duty and Peter Mandelson's links to Jeffrey Epstein.
With the welfare budget, particularly health-related benefits, projected to top £100bn by the end of the decade, successive governments have struggled to manage the growing bill. The success of Ms Reeves's latest welfare reform efforts remains uncertain amid fractious internal party relations.
