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Fears grow over further benefit cuts in autumn budget - as Rachel Reeves forced to tighten the belt on DWP
16 April 2025, 08:25 | Updated: 16 April 2025, 08:27
Rachel Reeves will come back for more benefit cuts in her autumn budget, insiders fear.
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Government sources have told LBC they think the Chancellor won’t be able to resist taking more chunks off the spiralling welfare bill if the public finances remain tight.
Ms Reeves was forced to tighten the belt on the Department for Work and Pensions in her spring statement last month, where she announced a £3.4billion cut to benefits.
Access to Personal Independence Payments will be tightened, and under-22s will no longer be able to get the health element of Universal Credit.
New claimants will also get a reduced health element of £50 a week – which will be frozen until the end of the decade.
Millions are expected to be hit by the changes, which will kick in over the coming years.
MPs are already unhappy about the shakeup to benefits, which is expected to come to the Commons for votes next month.
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A rebellion of backbenchers is brewing, who are urging the PM to think again.
Government sources say the welfare bill – which is still predicted to balloon – is far more of an easier target than other departments with big budgets – and they fear the savings expected won’t be enough to dent it.
One told LBC: “We’re only saving a few billion off a huge budget.
“We could be here all over again in six month’s time.
“We’re expending all this political capital, for not much saving.
“She’ll have little option to come knocking again when she can’t cut the defence budget, or the health budget.”
Spending on health and disability related benefits has spiralled since Covid, and is forecast to increase from £65billion a year to £100billion by 2029.
The government’s independent forecaster, the OBR, says the move will save the government £4.8billion by 2029 – but £1.9billion is going back into the Universal Credit system.
Employment minister Alison McGovern told LBC it was too early to be writing the next budget – but the government wanted to get as many people back to work as possible.
She said: "I'm not going to start writing a budget for the autumn at this moment.
"My concern is all of those people that have been written off... The challenge that we have to meet is to change the system, to use technology.
"It can be the worst day of somebody's life when something really bad's happened, they end up in the job centre, but that conversation with a job coach can be when it gets turned around.
"There's a lot of opportunity here to get people on the right path if we can make this reform work."
The Office for Budget Responsibility predicted that the economy would see a 0.6 per cent GDP hit as a potential result of Donald Trump’s tariffs.
That could squeeze tax receipts again - and force the Chancellor to look at further spending cuts to balance the books.
She’s already asked government departments to make huge cuts to budgets as part of the upcoming spending review, which will report back in the spring.
The Treasury was approached for comment.
