Labour's Disability Benefit Cuts Spark Outrage Amid Economic Strain, Critics Call for Alternative Measures
March 27, 2025
Labour has announced cuts to disability benefits as part of its fiscal policy response to a deteriorating economic outlook from the Office for Budget Responsibility (OBR).
Shadow Chancellor Rachel Reeves faced pressure to act, as failing to do so would breach fiscal rules due to declining forecasts compared to last October's budget.
The OBR's forecast indicated a decline in tax revenues, which prompted the government to adjust its spending plans, raising concerns about the impact on public services and support.
Critics argue that the decision to cut benefits instead of raising taxes reflects a political choice, suggesting the government opted for austerity rather than seeking additional revenue from wealthier individuals.
These cuts are projected to push at least 250,000 individuals into poverty, highlighting the severity of the fiscal measures being implemented.
The author criticizes this approach, asserting that inflicting hardship on vulnerable populations is neither responsible nor mature, and calls for alternative fiscal strategies.
Former Bank of England official Charlie Bean proposed a more prudent approach, suggesting that adjustments to tax and spending plans could wait until the 2025 Budget instead of making immediate cuts.
Reeves's decision to cut benefits may also be influenced by the political fallout from previous government missteps, particularly the cautious climate created by the Truss administration's policies.
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• Mar 27, 2025
Why can’t we do fiscal policy in a grown up way?