Rachel Reeves told the Today programme this morning that the government would not U-turn on its proposed cuts to sickness and disability benefits, while also saying that ministers would listen to “representations” from people wanting changes. (See 10.14am.) As for what this means, there is more detail in a letter that Liz Kendall, the work and pensions secretary, send to the Commons work and pensions committee about the cuts. It was published by the committee on its website yesterday. Kendall confirmed that the government is conducting a review of how the assesment for Pip (the personal independence payment –a non-means tested benefit for disabled people) is carried out. This will be led by Stephen Timms, the disability minister. But she also said that the government needs to legislate urgently on its plans, because the bill needs to pass by November for the benefit changes to be implemented in time for the 2026-27 financial year. She said the bill would need to start going through parliament before the Timms review was finished, and this meant the key changes were not subject to review. She explained: We have consistently been clear that we are not consulting on every proposal. Instead, parliament will have the opportunity to fully debate, propose amendments to, and vote on areas where we have announced urgent reforms that are not subject to consultation. With Pip caseload and costs forecast to continue rising, reforms are needed now to make the system sustainable, while supporting those people with the greatest needs. And, referring to the Timms review, she says: Our long-term ambition is to make Pip fit for the future for those it supports, which is why we have recently launched a wider review of the Pip assessment … The Pip assessment review will rightly take time and require extensive engagement, and we cannot wait for its conclusion to make the urgently needed changes to the Pip eligibility criteria. Cutting eligibiligy for Pip was one of the main proposals, and the most controversial, in the Pathways to Work green paper published in March. There is a summary of all the plans here. The government wants to legislate to change Pip so people will need to score a minimum of four points in at least one activity to qualify for the “daily living element” from November 2026. In the green paper it said: “We are not consulting on this measure.” The government is due to bring a bill implementing these changes to the Commons for second reading very soon. Here is Eleni Courea’s story on Rachel Reeves ruling out a U-turn on the cuts to sickness and disability benefits. Kemi Badenoch has also written an article for the Times saying she wants to see the size of the state reduced. She says: Cutting spending isn’t about austerity. It’s about smarter government. A state that does fewer things — but does them properly. One that protects borders, enforces the rules, defends property rights, and creates a climate where business can thrive. As a country we’ve lost the courage to say the obvious: that government can’t do everything. That the state can’t fix every problem. And that when we punish the people who create growth — the business owners, investors, entrepreneurs — the whole country loses. In her Today programme, Emma Barnett, the presenter, quoted this article, and asked Barnett what she meant when she said there were lots of problems the government could not fix. Badenoch replied: There is a lot that government does that has nothing to do with public services. We have endless quangos. We have endless sort of busybody work inspections. We can cut down on things like planning. There’s a lot that the government says they want to do in terms of getting housebuilding going. I want us to see what we can do in terms of deregulation. But, when Barnett asked her to give specific examples of what she would cut, Badenoch said she would not set that out now because the election was a long way away. Kemi Badenoch was on the Today programme earlier, and she insisted that the government was to blame for growth falling in April. She said: We have to start from the news that we had this morning – that the economy is shrinking, and it’s shrinking because of choices that the government has made. That is causing a problem that needs to be fixed. The first budget went after businesses, who are the ones who create growth. They went after jobs with the NI [national insurance] rises, and now we’re seeing that businesses are closing. Unemployment has risen pretty much every month since Labour came in. And that means that we have fewer people paying taxes and more people on the state. That needs to be fixed. She also accused the governemnt of waging “a war on the private sector”. But she would not say whether the Conservatives would reverse the rise in employer national insurance that is one of the main Labour policies criticised by business. The Resolution Foundation is holding a briefing about its spending review analysis. There is a live feed here. Here is a summary of the analysis. And here are the main points. Britain is morphing into a “national health state”, because health will take up half of day-to-day public spending by the end of the decade, the thinktank says. Yesterday’s NHS-dominated settlement continues a pattern of recent Spending Reviews, which has led to a major reshaping of the state. By the end of the decade (2028-29), the health service will account for half (49 per cent) of all day-to-day public service spending controlled by Westminster – up from a third (34 per cent) in 2009-10. While real, per-person funding for health has increased by 36 per cent between 2009-10 and 2028-29, it has fallen by 16 per cent for Justice, 31 per cent for Work and Pensions, and 50 per cent for Housing, Communities and Local Government over the same period. And Ruth Curtice, chief executive of the thinktank, said: Health accounted for 90 per cent of the extra public service spending, continuing a trend that is seeing the British state morph into a National Health State, with half of public service spending set to be on health by the end of the decade. The 2020s will see day-to-day public spending rising by much more than in the 2010s, but by much less than in the 2000s, the thinktank says. Real day-to-day spending is now rising again in the 2020s (2019-20 to 2028-29) by 2.2 per cent a year, following a 0.5 per cent fall per year in the 2010s (2009-10 to 2019-20). In the decade prior to that, spending rose by 4.3 on average each year (2001-02 to 2009-10). The extra public spending will benefit poorer families more, the thinktank says. The extra funding for hospitals, schools and the police relative to plans set out by the previous government will deliver important benefits-in-kind to families. The foundation estimates that a middle-income household will gain £1,400 on average for extra public service provision (in 2028-29), rising to £1,7000 for the poorest fifth of families. This is why the Treasury was able to publish figures yesterday suggesting that, overall, its record on tax, benefits and public spending has been highly progressive. Tax rises are “likely” in the autumn, the thinktank says. The large increase in public spending has been funded in large part by the £39.7 billion of tax rises (in 2028-29) announced in the Budget last Autumn and £3.6 billion of benefit cuts (in 2028-29) announced in the Spring Statement – equivalent to £1,550 for every family in Britain. But the combination of a weaker economic outlook, an unfunded spending commitment on winter fuel payments, and just £9.9 billion of headroom against the chancellor’s fiscal rules, mean further tax rises are likely to be needed this autumn. Q: Will there be fewer civil servants as a result of your plans? Yes, says Reeves. She says one example is the government’s decision to scrap NHS England. Q: You guarantee that the extra police promised by Labour in its manifesto will be funded? Reeves say she gave that commitment in her speech yesterday. Q: Are you assuming councils will increase council tax by the maximum 5% each year. That would be a £7.5bn tax rise. Reeves claims her plans are not based on the assumption that every council will raise council tax by the maximum allowed every year. Abel asks about the winter fuel payments U-turn cost, and gets the same reply ITV’s Good Morning Britain did. (See 8.40am.) It’s Times Radio next for Rachel Reeves. She is being interviewed by Stig Abell and Kate McCann. Abel starts off with the GDP figures, and Reeves repeats points she has made earlier, saying monthly figures are volatile, and the three-month figure much better. Q: What does stabilising the economy mean? Reeves says the Bank of England has been able to cut interest rates four times. But she recognises conditions are still tough for people, she says. Q: Where will asylum seekers be living when you get them out of hotels? Reeves says: “We need to deport more of them.” She claims this is happening. Q: But you are still budgeting for costs of £2.5bn. What are those for? Reeves says hotel accommodation is the most expensive form of accommodation. That is why the government is getting rid of them. Q: It will be a record year for cross-Channel crossings? That is why we are putting more money into Border Force. Abell repeats the question about where people will go. Do you know? Reeves says that is a matter for the Home Office. Q: Is it possible you may have to raise taxes more? Reeves says Labour committed in the manifesto not to raise the key taxes working people pay, income tax, national insurance, and VAT. She has kept to that and will stick to that, she says. And that’s the end of the ITV Good Morning Britain interview. Q: Do you accept that you are in a weaker position as chancellor than when you started? Reeves says she does not view the job as “trying to win a popularity contest”. Q: What taxes will have to go up? Reeves says her spending plans are funded. Q: But the winter fuel payments U-turns was not funded. So currently your sums do not add up. Reeves says this will be paid out in the winter. There are another OBR forecast to come before then, she says. Q: You claim all your spending plans are funded. But every economist says taxes are going to have to go up. Are you saying that won’t be necessary. Reeves repeats her point about no chancellor being willing to set budgets for years ahead. Rachel Reeves is now on ITV’s Good Morning Britain. Susannah Reid and Richard Madeley are interviewing her. Q: You must be disappointed about the growth figures? Reeves repeats the point about monthly growth figures being volatile. But she says the three-month figure shows growth at 0.7%. Reeves has got three more interviews this morning, according to Politico’s London Playbook. She will be on ITV’s Good Morning Britain, Times Radio and GB News. Before Today, she had already done three others. Q: Government borrowing costs are higher than they were just after Liz Truss’s budget. Reeves says the global situation has changed. But she accepts the government is spending too much on servicing government debt. And that’s the end of that interview. Q: Will you change your mind on disability cuts? No, says Reeves. But she says people are are unable to work have nothing to fear. There are 1,000 people a day going on to disability benefits, she says. The UK is the only developed country where the number of people in the labour market is lower than before Covid, she says. She says the government must help people back to work. Robinson explains the changes to Pip (the personal independence payments). Will you stop people getting it if they cannot wash properly. Reeves says the eligibility criteria are being reviewed. Q: So you might change your mind? Reeves says the policy has not changed. What has been announced already is a change to the eligibility criteria (which is what she was referring to a moment ago, she implies). UPDATE: Here is Eleni Courea’s story on this exchange. Q: Health leaders say the spending review plans won’t be enough to allow the government to hit its NHS performance targets. Reeves defends the settlement. But she says reform in the NHS is needed too. Q: The NHS budget is bigger than the entire budget of Portugal. Which is why are are squeezing in other areas. The mayor of London, Sadiq Khan, says the increase for the police will still lead to cuts in frontline policing in the capital. Reeves says the police have got 2.3% above inflation. She says she does not accept that there will need to be cuts. Q: The National Police Chiefs Council also says there will have to be cuts., Reeves repeats the point about the police getting an above-inflation settlement. Q: If there are cuts, will you do a U-turn? Reeves says, if the police are getting more than inflation, there will be no need for cuts. Robinson asks about the growth figures out today. Reeves says monthly growth figures are “notoriously volatile”. But April was a challening month. Q: It was challenging because you put taxes up? Reeves says the number of jobs in the UK has gone up. April was when President Trump announced his tariffs, she says. She says business surveys are “all ticking up” and “confidence is returning”. Q: That is what you said before the election – that nothing in your plans required tax rises. But you put taxes up by £40bn in your first budget. Reeves says no chancellor would write a budget for years ahead. But she repeats the point about all the spending review decisions being funded. Q: The former head of fiscal policy at the Treasury, Ruth Curtice, now runs the Resolution Foundation. She says tax rises are likely in the autumn. Other thinktanks say the same too. Is it fair to say you may have to increase taxes? Reeves says the OBR said policy changes would lead to more growth. The trade deals since then will help too. So lots is being done to “turbocharge the economy”. She says she set out plans yesterday to promote growth. All this is about “trying to put more money into working people’s pockets”, she says. Nick Robinson is interviewing Rachel Reeves on the Today programme. She is in Derby. Q: Do we have to prepare for tax rises in the autumn budget? Reeves says she made tax decisions in the budget last year. And she set a spending envelope. Yesterday was about allocating the money in that envelope. Everything was funded. Rachel Reeves has already been on Sky News. She told them the measures in the spending review did not require extra taxes, but she refused to rule out putting up taxes in the autumn budget. Good morning. Rachel Reeves, the chancellor, got a good reception from MPs when she addressed them yesterday after delivering her spending review. But she cannot avoid questions about whether taxes might have to rise in the autumn, and growth figures for April out this morning undermine the claim that the economy is turning round. Reeves is giving interviews this morning. Commenting on the growth figures, she said they were “clearly disappointing”. Our number one mission is delivering growth to put more money in people’s pockets through our Plan for Change, and while these numbers are clearly disappointing, I’m determined to deliver on that mission. In yesterday’s spending review we set out how we’ll deliver jobs and growth – whether that’s improving city region transport, a record investment in affordable homes or funding Sizewell C nuclear power station. We’re investing in Britain’s renewal to make working people better off. Here is the agenda for the day. Morning: Rachel Reeves, the chancellor, is doing a morning interview round. She is on the Today programme at 8.10am. 9am: The Resolution Foundation publishes its spending review analaysis. 10.30am: The Institute for Fiscal Studies publishes its spending review analysis. 10.50am: Kemi Badenoch gives a speech at the Peel Hunt FTSE250 conference in London. 11.30am: Downing Street holds a lobby briefing. Noon: John Swinney, Scotland’s first minister, takes questions from MSPs. 1pm: Wes Streeting, the health secretary, gives a speech at the NHS Confederation conference in Manchester. If you want to contact me, please post a message below the line when comments are open (normally between 10am and 3pm at the moment), or message me on social media. I can’t read all the messages BTL, but if you put “Andrew” in a message aimed at me, I am more likely to see it because I search for posts containing that word. If you want to flag something up urgently, it is best to use social media. You can reach me on Bluesky at @andrewsparrowgdn.bsky.social. The Guardian has given up posting from its official accounts on X, but individual Guardian journalists are there, I still have my account, and if you message me there at @AndrewSparrow, I will see it and respond if necessary. I find it very helpful when readers point out mistakes, even minor typos. No error is too small to correct. And I find your questions very interesting too. I can’t promise to reply to them all, but I will try to reply to as many as I can, either BTL or sometimes in the blog.
Author: Andrew Sparrow