LABOUR Chancellor Rachel Reeves warned yesterday that she intends to launch the biggest ever attack on the working class, the youth and the Welfare State in her Budget on Wednesday 26th November.
Blaming the Welfare State for one in eight young people being unemployed, she warned that they would be thrown off benefits, as she sought to reassure the banks and the money markets that war will be launched on public spending.
Reeves said she will make ‘necessary choices’ in the Budget after the ‘world has thrown more challenges our way’.
In what was an unusual ‘pre-Budget speech,’ Reeves indicated a U-turn on Labour’s general election manifesto pledge not to hike income tax, VAT or National Insurance.
At the end, when journalists explicitly asked if the government was set to break that pledge, she would not answer directly but said she was ‘setting the context for the Budget’.
Standing at a lecturn in Downing Street, bearing the message ‘Strong Foundations – Secure Future,’ two large Union Jacks behind her, she asserted that ‘the costs of everyday essentials remain too high’.
Complaining that ‘the cost of government borrowing has increased around the world,’ she said that this is ‘a shift that Britain, with our high levels of debt left by the previous government, has been particularly exposed to.’
She announced that she intends to throw the unemployed, especially the young unemployed, off benefits.
‘The Prime Minister, the Secretary of Work and Pensions, and this whole government are committed to reforming our Welfare State,’ she said, claiming: ‘There is nothing progressive about refusing to reform a system that is leaving one in eight young people out of education or employment.’
Exposing the extent of the bankruptcy of British capitalism, she revealed that the banks charge the UK the highest rates for borrowing, saying: ‘The UK’s National Debt now stands at £2.6 trillion, the equivalent of 94% of GDP.
‘Before the mini-budget our borrowing costs were in the middle of the pack compared to other advanced economies, but now we have the highest borrowing costs of any G7 country.
‘Today, one in every £10 of taxpayers’ money is spent on debt interest. Not paying that debt down, but just paying the interest for our creditors.’
She went on: ‘There are limits on the price that banks, hedge funds and pension funds are willing to pay for our debt. And we are competing constantly with other countries also selling debt. The more that we try to sell the more it will cost us.’
When pressed on which taxes might go up, Reeves refused to go into specifics.
She concluded: ‘I want to make £14 billion of efficiencies every year, rooting out waste wherever I find it.’
