Chancellor Asserts Benefit Cuts Will Not Increase Poverty Despite Criticism
Rachel Reeves insists that proposed welfare reforms aim to support employment, countering reports of potential increases in poverty.
Chancellor Rachel Reeves has declared that cuts to benefits will not exacerbate hardship among the population, following the release of an impact assessment indicating that approximately 250,000 individuals, including 50,000 children, may fall into relative poverty due to impending reforms in the welfare system.
This assessment accompanied Reeves' Spring Statement on Wednesday.
The analysis highlights that the reforms, which involve a reduction of nearly £5 billion in benefits payments, could adversely affect a significant portion of the low-income demographic.
Reacting to the assessment, Debbie Abrahams, Labour chair of the work and pensions select committee, expressed concern, stating that evidence suggests cuts to health and disability benefits will likely result in elevated poverty levels and deteriorating health conditions, questioning the efficacy of such measures in fostering economic growth and employment.
In defending her position, Reeves maintained in an interview with Sky News that the reforms are designed to facilitate employment opportunities, arguing that transitioning from welfare to work is correlated with a reduced likelihood of poverty.
"That is our ambition, making people better off, not making people worse off," she emphasized while reassuring that the welfare system will remain intact for those in genuine need.
Additional insights were provided by the Resolution Foundation, a think tank focused on living standards, which noted that the simultaneous challenges of a sluggish economic environment and the proposed benefit cuts disproportionately affect low-income families.
Their forecasting predicts a potential decline in average income for the poorest half of households, estimating a reduction of £500 over the next five years.
Reeves acknowledged the need for ongoing assessment, indicating that the Office for Budget Responsibility has yet to analyze the implications of the government's 'Back to Work' programme in relation to the welfare cuts.
She reiterated the government's commitment to support job acquisition, positing that employment contributes to alleviating financial pressures in households, particularly when the work provided offers a living wage.
The Chancellor also addressed an uproar among Labour MPs regarding comments made by a Treasury minister, Darren Jones, who likened the benefits cuts to withdrawing pocket money from children.
Reeves described the analogy as "clumsy" and affirmed that it did not accurately represent the situation.
This assessment accompanied Reeves' Spring Statement on Wednesday.
The analysis highlights that the reforms, which involve a reduction of nearly £5 billion in benefits payments, could adversely affect a significant portion of the low-income demographic.
Reacting to the assessment, Debbie Abrahams, Labour chair of the work and pensions select committee, expressed concern, stating that evidence suggests cuts to health and disability benefits will likely result in elevated poverty levels and deteriorating health conditions, questioning the efficacy of such measures in fostering economic growth and employment.
In defending her position, Reeves maintained in an interview with Sky News that the reforms are designed to facilitate employment opportunities, arguing that transitioning from welfare to work is correlated with a reduced likelihood of poverty.
"That is our ambition, making people better off, not making people worse off," she emphasized while reassuring that the welfare system will remain intact for those in genuine need.
Additional insights were provided by the Resolution Foundation, a think tank focused on living standards, which noted that the simultaneous challenges of a sluggish economic environment and the proposed benefit cuts disproportionately affect low-income families.
Their forecasting predicts a potential decline in average income for the poorest half of households, estimating a reduction of £500 over the next five years.
Reeves acknowledged the need for ongoing assessment, indicating that the Office for Budget Responsibility has yet to analyze the implications of the government's 'Back to Work' programme in relation to the welfare cuts.
She reiterated the government's commitment to support job acquisition, positing that employment contributes to alleviating financial pressures in households, particularly when the work provided offers a living wage.
The Chancellor also addressed an uproar among Labour MPs regarding comments made by a Treasury minister, Darren Jones, who likened the benefits cuts to withdrawing pocket money from children.
Reeves described the analogy as "clumsy" and affirmed that it did not accurately represent the situation.
