O texto seguinte servirá de base para responder à questão.
Tax rises and benefit cuts are on the horizon as
Reeves prepares the UK for a bad-news budget
The UK chancellor, Rachel Reeves, has made it clear
that taxes will go up, and more cuts to welfare spending
are on the horizon. The moves will be deeply unpopular
and controversial ? but in an extraordinary press
conference ahead of the UK budget on November 26,
Reeves made it clear that she believes both will be
necessary.
In a highly unusual move, the chancellor used the press
conference to set out her priorities for balancing the
books while growing the economy. Notably, she did not
mention the pledge in Labour's manifesto not to raise
taxes on working people or increase national insurance,
VAT or income tax.
Instead, she said her focus was on lowering the burden
of excessive government borrowing and debt, improving
public services and tackling the cost of living.
Reeves gave particular importance to sticking with her
"iron-clad" fiscal rules. These, she argued, were essential
for showing she is being responsible with the nation's
finances and preventing a further rise in the cost of
borrowing (the interest the government pays on its debt).
At more than £100 billion per year, this already makes up
10% of all government spending. The government's
spending watchdog, the Office for Budget Responsibility
(OBR), projects the total to rise to £111 billion by the next
financial year.
She also emphasised the importance of measures to
boost UK productivity. Productivity forecasts are
expected to be downgraded by the OBR, heaping yet
more pressure on the chancellor's budget choices.
Reeves questioned whether the forecast would
accurately predict the future ? but has accepted that she
will have to work within the OBR's constraints in this
year's budget.
The chancellor is right that there is a pressing need to
boost productivity. But it is by no means certain that
planned investment in things like housing, nuclear power
and a third runway at Heathrow will yield big gains, at
least in the near term.
At the same time, she made it clear that to meet her
budget target there will need to be cuts to public
spending. Some cuts will come from more "efficiency"
savings by government departments (that perennial
option that all chancellors reach for).
But they will also come from tackling the UK's rapidly
rising welfare budget, focusing on the large number of
young people who are not in education, employment or
training but depend on state benefits (so-called "Neets").
Any cuts to the welfare budget, as well as a failure to abolish the two-child benefit limit (although she is under
pressure from colleagues to bite the bullet and axe it), will
cause dismay within the parliamentary Labour party as
well as many party activists.
As ever, the budget choices will be political as well as
economic. Both the Conservatives and Reform UK will
accuse Labour of breaking its manifesto promises. They
will also claim Labour is undermining any chance of
growth by raising taxes by a larger amount than any UK
government has done in the last 50 years.
At the same time, it will become even more difficult for
Labour to manage its large but fractious parliamentary
majority. Earlier this year, backbenchers forced the
government to restore the winter fuel payment for some
pensioners and abandon plans to cut personal
independence payments for disabled claimants.
Local government elections, as well as elections to the
Scottish and Welsh parliaments, are looming next May.
Reeves risks further alienating Labour's grassroot
supporters and pushing them towards smaller left-wing
parties such as the Greens. They already seem to be
pulling ahead of Labour among younger voters.
The stakes could not be higher. A bad result could even
lead to questions about the future of both the chancellor
and the prime minister Keir Starmer.
Finally, the chancellor's goal to cut the cost of living for
working people does not seem particularly ambitious. Her
suggested approach involves cutting energy costs by
investing more in electricity generation, and reducing the
cost of food by changing the business rates system to
help small businesses.
Even if effective, these changes will take some time to
work through and may not be enough to convince voters
that Labour is on their side ? particularly if inflation is not
brought under control.
Reeves' appeal to the public to back her long-term
approach to sorting out the British economy may be
admirable. But the political risks to her personally ? and
Labour more broadly ? remain considerable.
https://theconversation.com/tax-rises-and-benefit-cuts-are-on-the-horizo
n-as-reeves-prepares-the-uk-for-a-bad-news-budget-269008
The text employs sophisticated vocabulary specific to
economics, government finance, and political analysis.
Terms like "fiscal," "manifesto," "productivity," "borrowing
costs," "welfare," "backbenchers," "grassroot supporters,"
and "OBR" (Office for Budget Responsibility) carry
specific meanings in British political-economic discourse.
Understanding these terms requires knowledge of their
precise meanings within specialized contexts. Which
analysis accurately defines these terms as used in this
political-economic context?
