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Cabinet Ministers’ Budget Backlash: A Labour Conundrum
First Bite
October 18, 2024
Good morning!
And happy Friday! Read on to find out what’s got some Labour ministers in a grump. We’re also looking at what Jenrick’s has proposed in order to prop him up a bit in the Conservative leadership polls!
In case you missed it:
🔵 Gove thinks Jenrick might be a bit of a liability for the Conservatives
🏡 Reeves plans to leave capital gains tax on property as it is—no changes there!
👨⚖️Ministers are set to give magistrates in England and Wales a bit more power when it comes to sentencing
💳 An inquiry is on the way after some carers were unexpectedly told to repay benefits
💀 The Archbishop of Canterbury warns that the assisted dying bill could be pretty dangerous
🤑 There’s some budget chaos as various government departments can’t seem to agree on spending decisions before the deadline
🛡️ Starmer fires back at Sunak over security questions in a heated exchange during PMQs
🇺🇦 A new report suggests the Commonwealth should consider inviting Ukraine to join
Subject: Jenrick’s Tax Vision: Cutting Costs or Cutting Corners?
As the race for Conservative leadership intensifies, Robert Jenrick has thrown down the gauntlet with his tax-cutting agenda. The former minister’s bold claim? He can slice 2p off the basic rate of income tax, but only by slashing welfare spending—a proposal that has sparked both intrigue and concern.
In a recent address, Jenrick argued that reducing the benefits bill by £12 billion is not just feasible; it’s essential. He’s calling for stricter sanctions on unemployed claimants who decline job offers and tighter controls on disability benefits, which he believes have been “misused.” He paints a picture of a welfare system that should support the genuinely unable while challenging those he deems capable of work.
But can this vision hold up under scrutiny? Critics are quick to highlight the difficulties of such sweeping reforms. The Institute for Fiscal Studies warns that previous attempts to curb benefits have often fallen flat. Additionally, the projected rise in disability payments raises questions about the sustainability of Jenrick’s plans.
As he aims for a smaller, more efficient state, the question remains: will these proposed cuts deliver the promised tax relief, or will they leave vulnerable groups in the lurch? With the leadership vote looming, the pressure is on Jenrick to clarify his stance and win over the party faithful.
Jenrick has said he would reduce benefits spending in order to enable cuts to income tax
Cabinet Ministers’ Budget Backlash: A Labour Conundrum
As we hurtle towards the Budget announcement on 30th October, tensions are simmering within Labour’s ranks. Several cabinet ministers, led by Deputy Prime Minister Angela Rayner, have escalated their concerns directly to Keir Starmer, effectively “going over the head” of Chancellor Rachel Reeves. This unusual move highlights the deep unease surrounding proposed spending cuts, which could reach a staggering 200% for some departments, amidst a looming £40 billion funding gap.
Ministers from the Ministry of Housing, Communities and Local Government, the Ministry of Justice and the Department for Transport have been particularly vocal. Shabana Mahmood, the Justice Secretary, warns that such cuts could “devastate” the criminal justice system, already grappling with a backlog of 68,000 cases. The alarm bells are ringing loud and clear, whilst a former advisor has likened the proposed cuts to a “nightmare” scenario, threatening vital public services.
The backdrop to this unrest is a new borrowing rule that mandates day-to-day spending be covered by tax revenues, leaving little room manoeuvre. Labour’s manifest commitments not to raise taxes on working people complicate matters further, prompting speculation about a potential extension of National Insurance to employer pension contributions and hikes in capital gains tax. The Chancellor might even entertain higher fuel taxes, especially with falling petrol prices.
Adding to the intrigue, both Starmer and Reeves will be out of the country in the week leading up to the Budget, leaving behind an anxious Cabinet and a looming deadline for finalising plans. Only minor adjustments can typically be made post-deadline, meaning the urgency for change is palpable.
Despite the Cabinet unrest, Downing Street insists that such letters of concern are par for the course during budget negotiations. Still, the widespread dissent underscores a potential fracture within Labour, with ministers from across the board - particularly those in “unprotected” departments - voicing alarm over the fiscal strategy.
As the countdown to the Budget continues, the stakes couldn’t be higher. With the government promising to “invest in the future” while grappling with the realities of austerity, one wonders: can Labour strike the right balance without alienating its own? Time will tell, but for now, it’s clear the Budget will be anything but straightforward.
Rachel, you’ve got 12 days to make EVERYONE happy - good luck!
Bite-Sized Bulletin:
What else has been happening around the world:
🇷🇺 There are suspicions that Russia planted a device on a plane, which led to a fire at a UK warehouse
Scrambled Eggs on the Side:
Awful joke of the day What do you call cheese that isn’t yours? Nacho cheese! | On this day On this day in 1867, after much opposition, a deal negotiated by US secretary of State William Seward for the US purchase of the Russian colony of Alaska was approved, with the US flag being flown for the first time over the capital, Sitka. |
Term of the day
Motions
A motion is a proposal put forward for debate or decision in the House of Commons or House of Lords. A motion must be proposed (moved) before any debate or vote can take place in Parliament.
That’s all for today, folks! Enjoy your weekend!