Britain’s finance minister, Rachel Reeves, has called for urgent reforms to the country’s welfare system, citing concerns that it is “costing too much” as the nation grapples with high inflation and rising borrowing.
Reeves is expected to announce significant cuts to welfare spending in her upcoming Spring Statement on March 26, following her inaugural budget in October.
The government’s fiscal position has been further strained by global challenges, including US tariffs and the ongoing war in Ukraine, leading to a depletion of the Labour administration’s £9.9 billion ($12.7 billion) financial cushion, news agency AFP reported.
In an interview on Sky News’ Electoral Dysfunction podcast, Reeves said, “We have to reform our welfare system because, right now, it’s letting down taxpayers. It’s costing too much and isn’t effectively helping those it should.”
She emphasized the need for a system that does more than provide benefits, aiming instead to support people back into employment. “We need to get better value for money from taxpayers’ contributions,” she added.
Any reforms could potentially conflict with the finance minister’s self-imposed fiscal rules, which prevent borrowing for day-to-day spending. These rules are meant to maintain the credibility of the government’s fiscal policies in financial markets.
Meanwhile, Prime Minister Keir Starmer has pledged to increase UK defence spending to 2.5% of the national economy by 2027, a commitment spurred by growing concerns over the US’s stance on Ukraine and NATO.
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