Further cuts of expected benefits such as Rachel Reeves forced to find £ 1.6 billion extra | News in the United Kingdom

Rachel Reeves will carry out further cuts in wellness in his spring declaration on Wednesday, after Office for Budget Responsibility He rejected his estimate of the savings from the controversial reforms announced last week.

The chancellor hoped to shift attention from the cuts of the benefits, which shocked some work backbencher, to promise to “protect the future of Great Britain” with a push of £ 2.2 billion to defense expenditure.

But it was understood that the final estimates of the OBR suggested the changes announced by Liz Kendall, the secretary of work and pensions, which included the strengthening of the criteria for payment for personal independence (PIP), would not have saved the £ 5 billion necessary to meet the self -imposed tax rules of Reeves.

The chancellor should announce further £ 500 million cuts of benefits to compensate for part of the £ 1.6 billion deficit, reported for the first time by Times – with the rest of the gap filled by the expenses cut elsewhere.

Reeves and his team were already prepared for a renewed reinforcement on well -being, while they were preparing to publish impact assessments together with Wednesday’s declaration, which will show the full impact of the cuts.

Additional measures should include the freezing of the extra universal credit payment made to those people who are less able to work until 2030, after an initial cut.

Some frontbencher previously had suggested that they could stop Beyond a freezing proposed to PIP, which has not been included in the Kendall package.

Despite the last minute scramble to find savings, the chancellor should still hit a robust note when he turns to parliamentarians, facing a growing speculation that will be forced to increase taxes, perhaps as soon as the autumn.

The expenditure for the additional defense of £ 2.2 billion for next year is a deposit against the government The aim of spending 2.5% of the GDP in defense – paid by cutting the expense for aid and immersing itself in the Treasury Reserve.

The chancellor will reiterate the government’s “ambition” to spend 3% of GDP in defense in the next parliament, “as the economic and tax conditions allow”. It is also expected to squeeze the future expenditure plans of Whitehall, to make sure that it is in the destination to meet its self-imposed tax rules, despite the weakest OBL projections-with all the details to be established in the revision of the June expenditure.

Since the last time the OBR has given its evaluation in October, the government loan costs have increased and economic growth has been weaker than it hoped. Reeves will underline his determination to go “faster”, to start the economy.

Some in labor had urged Reeves to flex his tax rules instead of outlining future cuts to shopping, but the treasure fears that any sign of indiscipline would risk scaring the bond markets and further drive the loan costs.

A source of work said that the ministers became frustrated by the way the OBR process works, with the changes to the last minute forecasts that significantly influence politics. “They think that the process should change, but they cannot go around, for market reasons, to shake it too much,” they said.

With the administration of Donald Trump who retires from the transatlantic defense cooperation and who threatens to impose broad rates next month, Reeves will repeatedly underline what the global context has changed.

“Our task is to protect the future of Great Britain in a world that is changing before our eyes. The work of a responsible government is not simply to look at this change”, he will say.

But analysts warn that these historical changes mean that even after promising shopping cuts, Reeves could still increase taxes to cope with rapidly growing pressure for greater defense expenditure.

Paul Johnson, director of the Institute for Fiscal Studies, said: “Even a small change in the spending plans will make this a revision of the expenditure even more difficult in June, and I think the greatest risk whether we have speculation starting from Thursday on which taxes will increase in autumn – and I think it is really quite politically risky and economically harmful.”

Paul Dales, chief economist of the United Kingdom of Consultancy Capital Economics, said: “We do not know how they intend to increase expenditure greater than 2.5% – this is really great. This is what has changed”. He added: “The thing he will really have to move is his commitments on taxes”.

Prof. Jonathan Portes, of King’s College London, said: “I don’t think they should now make great political changes, but I think they will have to reform and increase taxes over time”.

Reeves will tell the parliamentarians that the move to increase the expense for the defense, which has seen the resignation of the Minister of Development Anneliese Dodds to protest against the cuts to aid, was “the right decision in a more insecure world”.

“This government has been elected to change our country. To provide safety of workers. And delivering a decade of national renewal. That change of change began in July – and I am proud of what we have delivered in just nine months”, will say.

The chancellor and his treasure team tried to limit the probable repercussions from Wednesday’s announcement, aware that both the cuts to the Whitehall departments and the impact assessments on well -being cause anger on the benches of the work.

A Labor Deputy said: “Wednesday will be equally important for the impact assessments as for the same spring declaration – it is then that people will begin to decide whether or not they vote for these cuts”.

The officials say that they are planning to keep a vote on the changes to payments of personal independence in May, with about 30 Labor parliamentarians who currently think about rebelling.

Darren Jones, the chief secretary of the treasure, held a meeting with about 100 Frontbencher Tuesday to throw the ground for spending cuts to come. The people who participated in that meeting reported to The Guardian that they spent much insisting on the fact that the reductions in expenses did not equate to austerity, given that it is about half of the scope of those made by George Osborne as a chancellor from 2010 to 2015.

Wes Streeting, the Secretary of Health, told The Guardian Tuesday: “We cannot do everything for everyone, everywhere, all at once. There are many things that we would like to do now, but we must devote ourselves to our time so that we can fix the economy, because having those economic bases are the essential prerequisite for everything we need.”

Reeves will announce the details of a government transformation fund in which the Whitehall departments will be able to make an offer, to pay for productivity strengthening projects such as obsolete review. The treasure ministers claim that this will allow them to do more with less in future years, facilitating the impact of closer budgets on public services.

Reeves will confirm on Wednesday that he will start moving money immediately from the budget of defense aid, falling the hopes of some Labor parliamentarians who hoped that the cuts to the development budget would be delayed until 2027.

Sarah Champion, president of the work of the International Development Committee, said: “The government’s declaration on the cutting of aid has had a chilling effect on the development projects and on the moral of the staff, but it also had very real consequences. The renewals of the contracts are on pause and new highly suspended projects. Whatever the way of packing it, the cuts are happening now.”

The thrust of £ 2.2 billion in defense spending from April will bring the country’s military spending from 2.3% in 2024-25 to 2.36% in 2025-26. Ministers promised to achieve the target of 2.5% in two years.

The Shadow Chancellor, Mel Scree, said that Reeves, not global events, was to be blamed for the slowdown of the economy. “Our national security requires a strong economy. Yet since Rachel Reeves’s first budget, the growth is falling, the loan has expired and the trust of the companies has been destroyed,” he said.

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