Latest news with #welfareBill
Scotsman
10-07-2025
- Politics
- Scotsman
Why Labour incompetence created welfare Bill disaster – and worse is to come
Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... As a former Chief Whip, I often tell colleagues that the first rule of politics is to know how to count. You have to be able to add up the votes on your side of the aisle and the numbers on the opposite side – and make sure that your figures add up. That may appear to be a pretty low bar to clear but it is one that Keir Starmer's government has spectacularly failed to pass this week. Incompetence at the top of the government created utter chaos over the welfare Bill – but there may be far worse yet to come. Advertisement Hide Ad Advertisement Hide Ad A Bill that set out to cut back support for people with disabilities and health challenges was always likely to meet resistance from both inside and outside of Labour. That is why it is astonishing that the government only began to realise the scale of its miscalculation towards the end of last week, when more than 100 Labour members – led by several senior, moderate MPs – signed an amendment which would have brought down the Bill entirely. Chancellor Rachel Reeves was clearly emotional as Keir Starmer was grilled about the Labour rebellion over the welfare Bill (Picture: House of Commons/UK Parliament) | PA Wire High-handed ministers In one fell swoop, the massive Labour majority in the House of Commons was gone – and all because of the high-handed, contemptuous approach taken by those at the top. For a government to be blindsided in this way is a total failure of party management. It suggests that whips are either not doing their job, or are being ignored by those above them. Above all, it smacks of a government that thinks it is a lot cleverer than it really is, and that does not believe it is accountable to the MPs who make up their majority. What is so concerning about this week's debacle is that ministers appear to be unwilling to make the case for their policies, either with the public or with their own MPs. To govern, after all, is to choose. Advertisement Hide Ad Advertisement Hide Ad Sometimes cuts have to be made, tough decisions taken. If the planned cuts in the welfare budget were so necessary, as the government claimed up to the last minute, why were ministers so unwilling to win the argument with their colleagues? A lack of conviction This matters, because now that the government has shown that it cannot control its own party, every difficult vote becomes that much more difficult. The rebels have had a taste of successful rebellion – why would they stop here? What we are witnessing is a government that does not have the courage of its convictions. It may, in truth, not even have convictions to begin with – and a government that has neither the ideas nor the votes has a rocky road ahead of it. All indications, however, are that this poor management is going to continue. Just hours after the government turned tail on the welfare Bill, anonymous messages were circulating from the higher-ups, threatening that the two-child limit on benefits – one of the greatest drivers of child poverty in this country – would have to be kept in place to teach a lesson to rebellious MPs. Advertisement Hide Ad Advertisement Hide Ad If the government think they have the numbers to bully their MPs, they may have another thing coming. The first rule of politics is to know how to count.
The Guardian
08-07-2025
- Politics
- The Guardian
UN panel outs UK government on the spot over welfare bill
The UN organisation for disabled people's rights has asked the UK government for details about the impact of its welfare bill, expressing its concerns about the potential adverse effects. In a rare intervention, the Committee on the Rights of Persons with Disabilities asked about the legislation after receiving 'credible information' that it seemed likely to worsen the rights of disabled people. The central element of the bill – changes to personal independence payments – were removed last week to ward off a potential defeat by Labour rebels. A total 49 Labour MPs still voted against the revised legislation amid continued worries about other changes including to universal credit, the main means-tested benefit for people of working age. Labour backbenchers tabled a series of amendments before its return to the Commons on Wednesday for its remaining stages in the lower house. A letter from the Office of the High Commissioner for Human Rights, on behalf of the committee, said it 'respectfully requests information' about the bill, and in particular the extent of any impact assessment. It also sought information on 'any measures to address the foreseeable risk of increasing poverty rates amongst persons with disabilities if cuts are approved'. According to an impact assessment by the Department for Work and Pensions released on Monday, the revised bill will mean 50,000 fewer people are in relative poverty after housing costs in 2030. An assessment of the original plans found the measures would have pushed an additional 250,000 people into poverty, with some charities saying this figure would have been higher. The letter also requests information on the extent of consultation with disabled people and charities ahead of the bill being presented, and whether the House of Lords would be able to give only 'limited scrutiny' if, as expected, it is designated as a money bill, limiting the upper house's powers. The UN committee called for scrutiny of politicians and others in the UK 'portraying persons with disabilities as making profit of social benefits, making false statements to get social and disability benefits or being a burden to society'. Pointing to previous UN reports criticising the UK for its record over the rights of disabled people, the committee said it had 'received credible information indicating that, if approved, the universal credit and personal independent payment bill will deepen the signs of regression' found in earlier reports. Sign up to Headlines UK Get the day's headlines and highlights emailed direct to you every morning after newsletter promotion The letter ends by asking UK authorities to respond by 11 August, so the reply can be considered by the committee's formal session next month. The Department for Work and Pensions, which is responsible for the bill, was contacted for comment.
North Wales Chronicle
08-07-2025
- Business
- North Wales Chronicle
UK finances in ‘vulnerable' position after reversed spending cuts, says OBR
The Office for Budget Responsibility said the state finances were facing 'mounting risks' but that recent governments have had only limited success in improving the fiscal outlook. Reversals of planned tax increases and spending reductions, such as the recently proposed welfare Bill and winter fuel allowance cuts, contributed to a continued rise in Government debt, it said. 2025 Fiscal risks and sustainability report published – more highlights and charts to follow 📗 #OBRfiscalrisks Data and supporting documents now available on our website: — Office for Budget Responsibility (@OBR_UK) July 8, 2025 The report said: 'Efforts to put the UK's public finances on a more sustainable footing have met with only limited and temporary success in recent years in the aftermath of the shocks, debt has also continued to rise and borrowing remained elevated because governments have reversed plans to consolidate the public finances. 'Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned.' UK public sector debt stood at 96.4% of GDP (gross domestic product) in May, according to latest figures from the Office for National Statistics (ONS). The OBR said its annual fiscal risks and sustainability report that debt is projected to be 'above 270% of GDP by the early 2070s'. The forecaster added that recent rises in debts have led to 'a substantial erosion of the UK's capacity to respond to future shocks and growing pressures on the public finances'. The report also indicated that the state finances are likely to come under pressure in the longer-term from issues including significant growth in the cost of state pensions and climate-related factors. Spending on the state pension will rise sharply, linked to the commitment to the triple lock and a larger number of people above the pension age. The forecaster said the cost of the state pension has 'risen steadily over the past eight decades', from around 2% of GDP in the mid-20th century to the current 5% of GDP, or £138 billion, and is estimated to rise to 7.7% of GDP in the early 2070s. Demographic changes – more people living longer, healthier lives – and the triple lock up-rating mechanism are among the drivers for the continued rise, according to the OBR. It added: 'Due to inflation and earnings volatility over its first two decades in operation, the triple lock has cost around three times more than initial expectations.' The OBR report also highlighted that the UK's finances faces 'daunting' risks in the near term, such as challenging conditions across the global economy, which have pushed up borrowing costs for governments. The yield on long-term UK Government bonds, called gilts, currently sits near to record highs, making it more costly for the Treasury to pay down its debt bill. By the early 2070s, climate-related damage could reduce UK GDP by 8% in a scenario where global temperatures rise to just below 3°C. The impact on GDP is 3 percentage points more than estimated in the 2024 FRS.#OBRfiscalrisks — Office for Budget Responsibility (@OBR_UK) July 8, 2025 It also highlighted that commitments for increased defence spending also pose another risk to the sustainability of public finances. Meeting the new Nato target that countries should spend 3.5% of GDP on core defence by 2035 will increase spending by a further £38.6 billion, the report said. Another major risk highlighted is potential cyber attacks, in light of recent assaults on the Legal Aid Agency, HMRC and Marks & Spencer. It predicted that a cyberattack on critical national infrastructure has the potential to temporarily increase borrowing by 1.1% of GDP. Climate change also 'poses significant risks to economic and fiscal outcomes in the UK'. There is 'an increasing likelihood of more severe impacts of climate change on economies', the OBR said, as the latest analysis now accounted for 'the impacts of higher precipitation and temperature variability'. As a result, the OBR has updated its estimates for the economic damage caused by climate change in both its best case scenario – 2C of warming – and its worst case, an increase of 3C. GDP could fall by 3.3% by 2060 in the event of 2C warming, the watchdog said, and 7.8% by 2060 in the 3C scenario.
Leader Live
08-07-2025
- Business
- Leader Live
Public finances on ‘unsustainable' path due to spending promises, says OBR
It came as the Office for Budget Responsibility said public finances are in a 'relatively vulnerable position' amid pressure from recent U-turns on planned spending cuts. State finances are facing 'mounting risks' but recent governments have had only limited success in improving the fiscal outlook, the OBR said. Richard Hughes, chairman of the organisation, indicated that governments will need to adjust spending plans in the longer term to avoid national debt ballooning. 2025 Fiscal risks and sustainability report published – more highlights and charts to follow 📗 #OBRfiscalrisks Data and supporting documents now available on our website: — Office for Budget Responsibility (@OBR_UK) July 8, 2025 Downing Street however rejected suggestions that the Government is failing to heed warnings about the future of the public finances. Mr Hughes told a briefing in Liverpool that the projected rise in state pension spending linked to the triple lock commitment for annual increases was contributing to growth in national debt. He said the triple lock 'is one of a series of age-related pressures that pushes public spending upwards steadily over a number of years and, as you saw in our previous report, when you project trends in both pension spending and health and other age-related spending forward, the UK public finances are in an unsustainable position in the long-run. 'The UK cannot afford the array of promises that are displayed to the public if you just leave those unchanged, based on a reasonable assumption about growth rates in the economy and in tax revenues.' The triple-lock, which means state pensions increase by the highest of inflation, earnings growth of 2.5%, and a larger number of people above the pension age have caused a surge in spending on state pensions. The forecaster said the cost of the state pension has 'risen steadily over the past eight decades', from around 2% of GDP in the mid-20th century to the current 5% of GDP, or £138 billion, and is estimated to rise to 7.7% of GDP in the early 2070s. It added: 'Due to inflation and earnings volatility over its first two decades in operation, the triple lock has cost around three times more than initial expectations.' The OBR's annual fiscal risks and sustainability report suggested reversals of planned tax increases and spending reductions, such as the recently proposed welfare Bill and winter fuel allowance cuts, contributed to a continued rise in Government debt. The report said: 'Efforts to put the UK's public finances on a more sustainable footing have met with only limited and temporary success in recent years in the aftermath of the shocks, debt has also continued to rise and borrowing remained elevated because governments have reversed plans to consolidate the public finances. 'Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned.' UK public sector debt stood at 96.4% of GDP (gross domestic product) in May, according to latest figures from the Office for National Statistics (ONS). The OBR said its annual fiscal risks and sustainability report that debt is projected to be 'above 270% of GDP by the early 2070s'. The forecaster added that recent rises in debts have led to 'a substantial erosion of the UK's capacity to respond to future shocks and growing pressures on the public finances'. The report also indicated that the state finances are likely to come under pressure in the longer-term from issues including significant growth in the cost of state pensions and climate-related factors. The OBR report also highlighted that the UK's finances faces 'daunting' risks in the near term, such as challenging conditions across the global economy, which have pushed up borrowing costs for governments. The yield on long-term UK Government bonds, called gilts, currently sits near to record highs, making it more costly for the Treasury to pay down its debt bill. By the early 2070s, climate-related damage could reduce UK GDP by 8% in a scenario where global temperatures rise to just below 3°C. The impact on GDP is 3 percentage points more than estimated in the 2024 FRS.#OBRfiscalrisks — Office for Budget Responsibility (@OBR_UK) July 8, 2025 It also highlighted that commitments for increased defence spending also pose another risk to the sustainability of public finances. Meeting the new Nato target that countries should spend 3.5% of GDP on core defence by 2035 will increase spending by a further £38.6 billion, the report said. Another major risk highlighted is potential cyber attacks, in light of recent assaults on the Legal Aid Agency, HMRC and Marks & Spencer. It predicted that a cyberattack on critical national infrastructure has the potential to temporarily increase borrowing by 1.1% of GDP. Climate change also 'poses significant risks to economic and fiscal outcomes in the UK'. There is 'an increasing likelihood of more severe impacts of climate change on economies', the OBR said, as the latest analysis now accounted for 'the impacts of higher precipitation and temperature variability'. As a result, the OBR has updated its estimates for the economic damage caused by climate change in both its best case scenario, 2C of warming, and its worst case, an increase of 3C. GDP could fall by 3.3% by 2060 in the event of 2C warming, the watchdog said, and 7.8% by 2060 in the 3C scenario. A Number 10 spokesman said: 'We recognise the realities set out in the OBR's report and we're taking the decisions needed to provide stability to the public finances.' Asked whether the Government was failing to heed alarm bells being sounded by the Office for Budget Responsibility (OBR), the official said: 'No, I don't accept that. 'We have non-negotiable fiscal rules. Stability is the bedrock of growth as we've always said and that is why those fiscal rules are in place. 'But we recognise the long-standing economic realities the OBR sets out in its report.' The Conservatives criticised Labour's handling of the economy amid warnings from the OBR about the unsustainable future of public finances. Shadow chancellor Mel Stride said: 'While working families are tightening their belts, Labour have lost control of the public finances. 'The OBR's report lays bare the damage: Britain now has the third-highest deficit and the fourth-highest debt burden in Europe, with borrowing costs among the highest in the developed world. 'Under Rachel Reeves' economic mismanagement and Keir Starmer's weak leadership, our public finances have become dangerously exposed – vulnerable to future shocks, welfare spending rising unsustainably, taxes rising to record highs and crippling levels of debt interest.'
Powys County Times
08-07-2025
- Business
- Powys County Times
Public finances on ‘unsustainable' path due to spending promises, says OBR
The UK's state finances are on an 'unsustainable' path due to a raft of public spending promises the Government 'cannot afford' in the longer term, the boss of UK's official forecaster has warned. It came as the Office for Budget Responsibility said public finances are in a 'relatively vulnerable position' amid pressure from recent U-turns on planned spending cuts. State finances are facing 'mounting risks' but recent governments have had only limited success in improving the fiscal outlook, the OBR said. Richard Hughes, chairman of the organisation, indicated that governments will need to adjust spending plans in the longer term to avoid national debt ballooning. 2025 Fiscal risks and sustainability report published – more highlights and charts to follow 📗 #OBRfiscalrisks Data and supporting documents now available on our website: — Office for Budget Responsibility (@OBR_UK) July 8, 2025 Downing Street however rejected suggestions that the Government is failing to heed warnings about the future of the public finances. Mr Hughes told a briefing in Liverpool that the projected rise in state pension spending linked to the triple lock commitment for annual increases was contributing to growth in national debt. He said the triple lock 'is one of a series of age-related pressures that pushes public spending upwards steadily over a number of years and, as you saw in our previous report, when you project trends in both pension spending and health and other age-related spending forward, the UK public finances are in an unsustainable position in the long-run. 'The UK cannot afford the array of promises that are displayed to the public if you just leave those unchanged, based on a reasonable assumption about growth rates in the economy and in tax revenues.' The triple-lock, which means state pensions increase by the highest of inflation, earnings growth of 2.5%, and a larger number of people above the pension age have caused a surge in spending on state pensions. The forecaster said the cost of the state pension has 'risen steadily over the past eight decades', from around 2% of GDP in the mid-20th century to the current 5% of GDP, or £138 billion, and is estimated to rise to 7.7% of GDP in the early 2070s. It added: 'Due to inflation and earnings volatility over its first two decades in operation, the triple lock has cost around three times more than initial expectations.' The OBR's annual fiscal risks and sustainability report suggested reversals of planned tax increases and spending reductions, such as the recently proposed welfare Bill and winter fuel allowance cuts, contributed to a continued rise in Government debt. The report said: 'Efforts to put the UK's public finances on a more sustainable footing have met with only limited and temporary success in recent years in the aftermath of the shocks, debt has also continued to rise and borrowing remained elevated because governments have reversed plans to consolidate the public finances. 'Planned tax rises have been reversed, and, more significantly, planned spending reductions have been abandoned.' UK public sector debt stood at 96.4% of GDP (gross domestic product) in May, according to latest figures from the Office for National Statistics (ONS). The OBR said its annual fiscal risks and sustainability report that debt is projected to be 'above 270% of GDP by the early 2070s'. The forecaster added that recent rises in debts have led to 'a substantial erosion of the UK's capacity to respond to future shocks and growing pressures on the public finances'. The report also indicated that the state finances are likely to come under pressure in the longer-term from issues including significant growth in the cost of state pensions and climate-related factors. The OBR report also highlighted that the UK's finances faces 'daunting' risks in the near term, such as challenging conditions across the global economy, which have pushed up borrowing costs for governments. The yield on long-term UK Government bonds, called gilts, currently sits near to record highs, making it more costly for the Treasury to pay down its debt bill. By the early 2070s, climate-related damage could reduce UK GDP by 8% in a scenario where global temperatures rise to just below 3°C. The impact on GDP is 3 percentage points more than estimated in the 2024 FRS. #OBRfiscalrisks — Office for Budget Responsibility (@OBR_UK) July 8, 2025 It also highlighted that commitments for increased defence spending also pose another risk to the sustainability of public finances. Meeting the new Nato target that countries should spend 3.5% of GDP on core defence by 2035 will increase spending by a further £38.6 billion, the report said. Another major risk highlighted is potential cyber attacks, in light of recent assaults on the Legal Aid Agency, HMRC and Marks & Spencer. It predicted that a cyberattack on critical national infrastructure has the potential to temporarily increase borrowing by 1.1% of GDP. Climate change also 'poses significant risks to economic and fiscal outcomes in the UK'. There is 'an increasing likelihood of more severe impacts of climate change on economies', the OBR said, as the latest analysis now accounted for 'the impacts of higher precipitation and temperature variability'. As a result, the OBR has updated its estimates for the economic damage caused by climate change in both its best case scenario, 2C of warming, and its worst case, an increase of 3C. GDP could fall by 3.3% by 2060 in the event of 2C warming, the watchdog said, and 7.8% by 2060 in the 3C scenario. A Number 10 spokesman said: 'We recognise the realities set out in the OBR's report and we're taking the decisions needed to provide stability to the public finances.' Asked whether the Government was failing to heed alarm bells being sounded by the Office for Budget Responsibility (OBR), the official said: 'No, I don't accept that. 'We have non-negotiable fiscal rules. Stability is the bedrock of growth as we've always said and that is why those fiscal rules are in place. 'But we recognise the long-standing economic realities the OBR sets out in its report.' The Conservatives criticised Labour's handling of the economy amid warnings from the OBR about the unsustainable future of public finances. Shadow chancellor Mel Stride said: 'While working families are tightening their belts, Labour have lost control of the public finances. 'The OBR's report lays bare the damage: Britain now has the third-highest deficit and the fourth-highest debt burden in Europe, with borrowing costs among the highest in the developed world. 'Under Rachel Reeves' economic mismanagement and Keir Starmer's weak leadership, our public finances have become dangerously exposed – vulnerable to future shocks, welfare spending rising unsustainably, taxes rising to record highs and crippling levels of debt interest.'
