The UK Prime Minister will push for cuts to the UK social welfare system.
According to The Daily Telegraph, after adjustments at 10 Downing Street, the UK Prime Minister will push for cost-saving welfare reforms. Sir Keir Starmer is determined to completely reform the disability payment system, encouraging people receiving long-term sick leave benefits to return to work, despite opposition from Labour MPs.
It is reported that this reform will become a key focus for the newly formed "strong" team at 10 Downing Street. On Monday, Sir Keir conducted a minor reshuffle, which seems to have weakened the authority of the Chancellor of the Exchequer, including moving the Chancellor's key aide Darren Jones into 10 Downing Street.
UK Chancellor of the Exchequer Rachel Reeves was a key architect of the initial Cohen welfare cut scheme, which was announced in spring but was significantly scaled back due to widespread opposition within the Labour Party. It is expected that the Prime Minister's changes will allow him to use more of his authority to ensure that Labour MPs approve significant welfare spending cuts when the request is made again.
Although the spokesperson for the UK Prime Minister insisted that Ms. Reeves was not sidelined in the reshuffle, financial markets experienced turmoil yesterday, with the British pound falling 1.8% against the US dollar. At the same time, the cost of long-term borrowing in the UK rose to the highest level in 27 years. The yield on 30-year UK government bonds (the actual interest rate paid by the government for borrowing) increased by 0.05 percentage points to 5.69%. The Chancellor now faces the task of raising hundreds of billions of pounds annually in the budget scheduled for November, most likely through tax increases.
Welfare spending inevitably becomes a target. In the coming weeks, a new terms of reference for reviewing one of the main disability benefits, the Personal Independence Payment, will be published, along with the announcement of a joint chairperson. Next month, Sir Charlie Mayfield will also propose recommendations on how employers can help disabled employees keep their jobs. One factor in Sir Keir's reshuffle at 10 Downing Street was realizing, only days before the vote, the extent of the resistance to the initial welfare plan, which led to two major revisions being rushed through.
In the coming months, ministers may talk about "reforms" rather than cuts, focusing on the "Labour argument" that helping people find work. A spokesperson for the Department for Work and Pensions said: "The government is determined to establish a sustainable welfare system that is fair to taxpayers and those who use the welfare system."
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