Key Highlights
- Rachel Reeves, Chancellor of the Exchequer, refused to withdraw a misleading statement regarding welfare spending.
- The Financial Times and Disability News Service (DNS) have reported that welfare spending is not spiralling out of control.
- Government sources are planning to raise revenue from the Motability disabled people’s vehicle scheme by £1 billion annually.
- Rachel Reeves’ statement contradicts official figures from the Office for Budget Responsibility (OBR).
Rachel Reeves Defends Controversial Welfare Spending Statement
Chancellor Rachel Reeves has firmly stood her ground, refusing to apologise for a misleading claim that welfare spending is spiralling out of control. This stance comes amidst growing criticism from disability advocates and independent news sources who argue that such claims are baseless.
Reeves’ Statement and Its Impact
In an interview with Channel 4 News, Chancellor Reeves reiterated her previous assertion, stating, “We can’t get to the end of this parliamentary session and have done nothing because if more and more of our money that we spend as a government is spent on welfare, you’ve got less for the NHS, you’ve got less for schools.” This statement has drawn significant backlash from disability rights groups and financial analysts alike.
Dispute Over Welfare Spending Figures
The controversy centers around official figures released by the Office for Budget Responsibility (OBR) in October 2024. According to these figures, welfare spending as a percentage of GDP is predicted to remain stable over the next several years. Specifically, the OBR reported that welfare spending was expected to be 11.1 per cent in 2024-25 and would fluctuate slightly but remain below pre-Brexit levels by 2030.
Chris Giles of The Financial Times concurred with this analysis, stating, “The welfare system is far from perfect but it cannot be blamed for your taxes rising in November’s Budget.” His article further reinforced the OBR’s findings and contradicted Reeves’ claims, pointing out that projected total welfare payments were lower than when David Cameron was Prime Minister.
Government’s Stance and Future Implications
The Treasury has thus far declined to explain why senior ministers continue to make these misleading statements despite the availability of accurate data. DNS, which has been sharing this information with various parties including Labour and Conservative officials, emphasizes the need for transparency in government spending.
As the Chancellor prepares her budget for November 2025, questions remain as to whether the contentious issue will impact her policy decisions or lead to a broader reconsideration of how welfare is perceived and managed within the UK economy. The ongoing dispute highlights the importance of accurate fiscal reporting and the potential consequences of misleading public statements on sensitive social issues.
