Spring Statement: Backlash begins as ‘politically painful’ welfare cuts loom

Backlash from unions and activists has begun following a BBC report that the Treasury is eyeing billions of pounds in welfare and other departmental cuts amid expectations that the Chancellor’s fiscal headroom has been wiped out.

Insiders have told the broadcaster the “politically painful” cuts are aimed at stemming the growth of health-related benefits as Rachel Reeves’ first Spring Statement approaches later this month.

The proposed spending cuts will be presented to the Office for Budget Responsibility (OBR) today. The OBR’s updated forecast at the Spring Statement is expected to see the £9.9bn fiscal headroom from last autumn’s Budget evaporate.

A government source told the broadcaster: “Clearly the world has changed a lot since the autumn Budget. People are watching that change happen before their eyes.

“The Office for Budget Responsibility will reflect that changing world in its forecasts later this month and a changing world will be a core feature of the chancellor’s response later this month.”

But any cuts to welfare are likely to be met with fierce opposition from some Labour backbenchers, with many having already publicly criticised the government’s stance on winter fuel cuts and the two-child benefit cap.

Hannah Peaker, deputy chief executive at the New Economics Foundation, was quick to criticise the reported proposals. She said: “Trailed cuts to welfare will mean an even bigger squeeze on living standards for the poorest, undermining the government’s growth mission and flying in the face of their child poverty strategy.”

Her sentiments were echoed by PCS general secretary Fran Heathcote, who said: “Cutting civil service jobs will damage public service and cutting disability benefits will condemn people to poverty.

“We’d have hoped we wouldn’t have to explain the damage wreaked by austerity to a Labour government.”

Fire Brigades Union general secretary Steve Wright also hit back at the prospect of cuts, saying: “It would be an outrageous attack on the poorest and most vulnerable. Many workers who are in receipt of income support and other benefits would suffer from any cutbacks.”

However, the measures may end up being more popular with the wider public.

Polling from YouGov suggests 53% of Brits think the qualifications for receiving benefits are not strict enough, opposed to just 25% who say they are too strict and 8% who think the balance as it stands is right.

The Spring Statement will be delivered by the Chancellor on March 26.

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