Chancellor Rachel Reeves responded to recent Conservative attacks and the government’s recent claims of appeasing ongoing strikes by stating that there would be “no blank cheques” for public sector unions. Although the Government has accepted the ‘single figure of percentage increase’ for pay review body recommendations for real-term increases for police, teachers, and armed forces, Reeves clarified the fact that there has been no ‘capitulation’ to the demands made by the train drivers and junior doctors.
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Reeves in his response supported the government’s position on pay in the public sector
While touring through a new rent-to-buy housing project in Liverpool’s docklands, Reeves suggested that the debt ceiling could be raised by changing the definition of debt to conform to the Labour government’s fiscal rules. She argued that even though the next budget will contain aggressive tax, spending, and welfare policies, she wants to be known as the Chancellor who does ‘the right thing’.
Despite calls from James Cleverly, the Conservative leadership contender that Tom Watson and Labour were acting like ‘Marxist puppets’ after the new pay deal offered to Aslef train drivers, Reeves did not budge. She opined that the government’s effort was to call off the strikes, which had an impact on the nation’s economy. We have not succumbed to any pressures – the younger doctors or the train drivers have not been treated in this manner, she affirmed.
Pledge to Go for Above-Inflation Wages for More Essential Workers
Reeves also justified the government’s decision to award the above-inflation pay raises to police officers, members of the armed forces, and teachers, which has not happened in more than ten years. She pointed to a combination of acute recruitment and retention problems in these core industries and warned that had the government not moved in sync with pay review body recommendations it would have been very devastating.
Public sector unions have been claiming something called ‘pay restoration,’ meaning above the inflation pay rise to offset a decade of pay capping. Yet, Reeves was adamant that it is she and Keir Starmer who decide the Labour Party’s policies and not trade unions. ”And there are no blank cheques,” she reiterated.
Pressure grows on Reeves over the two-child limit on child benefit
The Chancellor has also come under pressure from poverty charities and some Labour MPs to scrap the two-child benefit limit. That said, she was not willing to make any commitments as to when and or if this change might be implemented. Despite the containers full of amounts that wouldn’t have been done there is much that cannot be undone with a single budget and 14 years of wreckage is no small feat, Reeves said, “We have humongous difficulties yes, we are incapable of doing all that people want from us or all that we would like to do ourselves.
Rejection of Austerity Claims
Reeves was particularly keen to respond to criticisms that suggested that her budget was derived from George Osborne’s 2010 austerity budget. She emphasized that she just provided public sector employee with their first real pay rise in a decade and said, “That’s not austerity. ” For Reeves, stringent measures are occasioned by the fact that UK public finances are in a terrible state. She pitted her policy stance against Osborne’s by saying: ‘I sometimes think George Osborne would have loved to reduce the state and to make some surgeries.
Prospective Alterations in the Computation of Debt
Among the possible modifications in the context of the next budget, the government’s debt rule might be altered. At the moment, the rule calls for a reduction in public debt from the level of national income within five years. Nevertheless, this calculation factors in the provision for losses occasioned by the Bank of England on its bond purchase agreements. Some economists opine that eradicating the Bank from this debt definition would make it possible for Reeves to access between 13 to 20 billion pounds more annually.
