Chancellor compares slashing benefits to cutting children's pocket money - as she reveals how much her kids get

26 March 2025, 22:02 | Updated: 26 March 2025, 22:27

Rachel Reeves compared slashing benefits for millions of people to cutting pocket money for her children as she defended her Spring Budget.

Speaking exclusively to LBC’s Iain Dale, the Chancellor defended her spring budget, which saw welfare spending slashed and defence spending boosted.

Her comments come after Treasury Secretary Darren Jones compared those on benefits losing over £4,000 per year due to the cuts to his kids losing £10 per week in pocket money.

Following the Chancellor’s decision to cut welfare spending by £3.4bn, the Office for Budget Responsibility forecast that more than 3 million Brits will be worse off, and as many as 250,000 people will be plunged into poverty.

Read more: Rachel Reeves admits UK growth forecast to be slashed in half as she announces £3.4bn in benefits cuts

Watch Again: Iain Dale's exclusive interview with Rachel Reeves

Those who have their Personal Independence Payment axed could lose more than £4,500 per year, it was forecast.

Ms Reeves, however, rejected this claim, comparing it to her child losing some pocket money but then getting a part-time job instead.

Ms Reeves told LBC: "If you have a 16-year-old and say, I won't give you so much pocket money, I want you to go out to work.

But then Office for Budget Responsibility comes and does an impact assessment and says you're going to be worse off... you will be worse off if you don't get a Saturday job, but if they do, they will be better off.

“There are a lot of people who have a disability who are desperate to work."

The Chancellor also revealed she pays her kids between five and ten pounds a week each.

The Chancellor's comments come after she confirmed growth predictions for 2025 had been slashed in half and announced a slew of benefit cuts in her Spring Statement.

Growth is now expected to be just 1% for the year, half of the Office for Budget Responsibility’s previous prediction.

When pressed on the potential of hundreds of thousands of people falling into poverty, Ms Reeves told LBC "I don't think that will happen."

She said: "Well, look, the numbers in that impact assessment about the welfare reform are based on no changes in terms of people going back to work.

"But the whole point of the welfare reforms that we're making is about giving targeted, personal guaranteed support to people who are on sickness and disability benefits to help them to fulfil their potential and find work that that is appropriate for them so that they're not going to be getting less money, but they will actually benefit from employment.

"At the moment, 1,000 people a day are going on to personal independence payments.

"That is simply not sustainable.

"And we've got a situation today where one in eight young people are not in education, employment or training.

"I'm not willing to write off a generation of young people in that way. I don't want them on sickness and disability benefits, I want them in work."

Responding to the cuts, Christina McAnea, General secretary of Unison, told LBC's Ben Kentish: "It's indefensible.

"They need to get a message out there which is saying, we want people to feel better in this country.

"And then after those, that 250,000 who will go further into poverty is not a way to make people feel confident about the country.

Natasha Clark: 3 things that stood out from the Chancellor’s press conference

Speaking in the House of Commons on Wednesday, Ms Reeves added the OBR had upgraded its growth forecast "next year and every single year thereafter", saying: "With GDP growth of 1.9% in 2026, 1.8% in 2027, 1.7% in 2028, and 1.8% in 2029.

"By the end of the forecast our economy is larger compared to the OBR's forecast at the time of the budget."

Ms Reeves added: "Compared to the forecast in the final budget delivered by the party opposite, and after taking account of inflation, the OBR say today that people will be on average over £500 a year better off under this Labour Government."

Reeves also claimed households will be £500 better off under this government.

"That will mean more money in the pockets of working people," she added.

She also said she plans to get more people into jobs and that inflation is expected to fall gradually.

"Having peaked at 11% under the previous government, the OBR forecast that CPI inflation will average 3.2% this year before falling rapidly to 2.1% in 2026 and meeting the 2% target from 2027 onwards,".

Ms Reeves said her statement "does not contain any further tax increases" before she highlighted a crackdown on tax evasion.

She told the Commons: "Today, I go further continuing our investment in cutting-edge technology, investing in HMRC's capacity to crack down on tax avoidance and setting out plans to increase the number of tax fraudsters charged each year by 20%.

"These changes raise a further £1 billion taking total revenue raised from reducing tax evasion under this Government to £7.5 billion."

I am proud of what we have delivered in just nine months, says Rachel Reeves

Labour MP for Norwich South, Clive Lewis told LBC Reeves was "balancing the books" on the backs of disabled people.

"We as MPs and many of my constituents watched as for 14 years, George Osborne and successive Tory chancellors pillaged, burned, dismantled public services, destroyed our communities, undermined our infrastructure.

"And we thought we'd learnt the lesson that you can't balance the books on broken backs, that you can't cut your way to growth.

"I thought we'd learned that lesson, but it doesn't feel we have.

"And I think that's part of the disappointment."