Chancellor Rachel Reeves has said the country must ‘get a grip’ on welfare ahead of expected radical reforms next week. She also reacted to the UK’s economy having contracted by 0.1% in January, saying the government must go “further and faster” to achieve growth.
false,Friday 14 March 2025 09:00, UK
By Connor Gillies, Scotland correspondent
The last thing I was expecting to discover on the doorstep of a Falkirk house was a 70-year-old woman crying at the near 16% council tax rise she and tens of thousands of others face next month.
Falkirk is bracing for the UK’s biggest hike in bills as the local authority faces a crisis of costs.
One councillor responsible for the increases has called in the police after receiving beheading taunts and threats of violence.
The area is facing its most difficult period in its 30-year history, while residents feel fragile and fobbed off.
Councils oversee the running of schools and social care, maintaining roads and collecting bins. They take charge of housing, swimming pools and libraries. The list is endless.
But Britain’s local authorities are cash-strapped and there are questions about how they should be funded in the long term.
Sky News went inside one Falkirk street to get a snapshot of the mood – and it was bleak.
Now joining Sky News Breakfast is shadow justice secretary Robert Jenrick.
Asked about the 0.1% fall in GDP in January, the Conservative MP says this is “very concerning” – but “not unexpected”.
He adds: “This is the result of the decisions that were taken by the chancellor and her disastrous budget last year, where she hiked taxes, particularly on businesses.
“That has led to growth falling confidence across business, particularly in manufacturing collapsing and further harm to the economy.
“And just 12 days time, we’re going to have this emergency budget, which Rachel Reeves said she’d never have to do, just coming back to parliament to cut public spending and potentially to increase taxes.
“This is all the result of the bad decisions that she made last year.”
Reeves is due to deliver her Spring Statement on 26 March.
Rather than act as a second budget, this will give an update on her plans for the UK economy.
👉 Click here to listen to Electoral Dysfunction on your podcast app 👈
Sir Keir Starmer is doubling down on his bid to reduce government waste, but is his plan a fix or just more spending spin?
Beth is in Hull after hearing what the Labour leader is promising, including scrapping NHS England to “cut bureaucracy” and bring management of the health service “back into democratic control”.
Alongside Harriet and Ruth, they also discuss Starmer potentially facing down a rebellion from his own MPs over plans to shake up benefits reform and welfare payments.
ANd are the cracks are widening in Reform UK’s internal spat. Beth speaks to Andrea Jenkyns, who left the Tories to join Reform, on the party’s latest bust-up, and Ruth and Harriet look at whether the party’s chaos is helping both Labour and the Conservatives.
Email us at electoraldysfunction@sky.uk, post on X to @BethRigby, or send a WhatsApp voice note on 07934 200 444.
And remember, you can also watch us on YouTube!
By Alexandra Rogers, political reporter
The prime minister is laying the ground for big changes to long-term sickness and disability benefits.
Ministers have stressed there are currently 2.8 million people not in work due to ill-health, while one in eight young people are not in education, training, or employment – something they say isn’t sustainable.
However, disability charities have warned against draconian cuts to welfare, which they say could push hundreds of thousands more people into poverty at a time when costs are still high.
So, what changes could be on the way?
Personal Independence Payments (PIP)
PIP is a tax-free payment given to people aged 16-64 to help with the extra costs caused by long-term ill-health or disability.
There are two components:
It’s possible to meet the criteria for one part or both parts, and payments vary for each.
Those who qualify for the daily living part are given either a lower rate of £72.65 per week or a higher rate of £108.55, and those who qualify for the mobility part either receive £28.70 or £75.75.
Who is currently eligible?
People aged between 16-64 can get PIP if they expect their difficulties to last for at least 12 months from when they started.
What could change?
Changes being mooted include making it harder to qualify for PIP and freezing payments next year so they don’t rise with inflation – something even austerity chancellor George Osborne didn’t do.
Universal Credit
Universal Credit is available to those who are on a low income, out of work or cannot work.
The benefit is replacing the six you can currently claim:
According to ITV News, the basic rate for Universal Credit could be increased for those who are in work or searching for work, and could be cut for those who are judged unfit to work.
Merging benefits
The Sun has reported that workers who lose their jobs will receive priority for benefits over those who have never had one.
An “unemployment insurance” benefit would merge Jobseeker’s Allowance – the benefit paid to people who are out of work but looking for a job – and the Employment and Support Allowance, used for those with a disability or health condition that affects how much they can work.
The newspaper reported the new support would be time-limited, and all claimants would have to actively seek work to qualify for it.
Chancellor Rachel Reeves has insisted that the welfare system is “not working for the people who need support” as the government prepares for cuts.
In Edinburgh today, the chancellor was asked whether planned reforms to the welfare system could punish the most vulnerable.
She said: “It is absolutely clear that the current system is not working for anyone.
“It is not working for people who need support, it’s not working to get people into work so that more people can fulfil their potential, and it’s not working for the taxpayer when the bill for welfare is going up by billions of pounds in the next few years.
“We do need to get a grip.
“We need to spend more on national defence, we need to reform our public services, and we need to reform our broken welfare system.”
Listen to the Politics at Jack and Sam’s podcast below to hear more about whether Rachel Reeves is about to cut welfare.
Chancellor Rachel Reeves today said that the government is “determined to turn around the poor performance” of more than a decade when it comes to economic growth.
Reacting to news that the economy contracted by 0.1% in January, Reeves says it is clear the government “need to go further and faster in growing our economy”.
She adds: “That’s why the prime minister set out yesterday reforms to regulation. That’s why this week we’ve introduced the Planning and Infrastructure Bill to get Britain building again.
“But we must go further and faster to boost living standards and grow our economy.”
The chancellor was asked whether this contraction could be the result of uncertainty around Donald Trump – and the impact of his steel tariffs.
“This government believes in free and open trade, and we’ll continue to make that point,” she says.
“We are in negotiations at the moment for an economic agreement with the United States to try and ensure that British exporters are supported to export all around the world, including to the United States, and to ensure that we don’t push up prices for UK consumers with more tariffs.”
Karin Smyth, the health minister, is now asked about anticipated cuts to welfare spending, which are widely expected to become a major internal row in the Labour Party.
This week, all 404 Labour MPs were invited to Downing Street for briefings on the matter.
Asked about the anticipated reforms, Smyth says “every member” of the cabinet is “absolutely behind” Sir Keir Starmer.
She tells Sky News: “I think every member of the cabinet of this government is absolutely behind Keir Starmer’s drive to grow the economy and deliver on the missions that we were elected on.
“Of course, there are discussions about how we do that.”
Smyth says it is “difficult”, but the “prime minister is absolutely clear” that our focus is on “people”.
The minister was also asked about Starmer’s decision on Thursday to abolish administrative body NHS England.
She says: “I was prompted to become a member of parliament because of those reforms the Conservatives put in place in 2013, because I could see when they destroyed the infrastructure of the health service and replaced it with something outside the health service that that was a disaster.
“The Tories tinkered with changing that, but they never took this bold step we’ve taken yesterday.
“Every single Conservative said ‘we wish we’d done the same’.”
Karin Smyth, the health minister, is now joining Sky News Breakfast.
Reacting to news that GDP fell by 0.1% in January, Smyth stressed it is going to “take time” to fix a “low growth, stagnating economy”.
She says: “It’s not good to see a very slight contraction this morning.
“But we think that the measures that we’re putting in place – giving confidence to the economy, getting people back to work – will start to yield benefits.”
The UK economy shrank at the start of 2025, according to official figures which had been expected to show further meagre growth.
The Office for National Statistics (ONS) said that output declined by 0.1% during the month following the 0.4% growth seen in December.
A growth figure of 0.1% had been tipped by a majority of economists.
The ONS said a slump in manufacturing output was to blame.
Bridget Phillipson will today call on headteachers to “catch up fast” to improve pupil attendance.
The education secretary is expected to accuse some schools of “not making enough progress” on absences – as she calls for “old-fashioned graft”.
Some 3.6 million children missed 10 days or more of school last year and 1.6 million – more than one in 10 – missed a day every fortnight, according to the Department for Education.
Children in Year 11 who miss 10 days of school are half as likely to achieve a grade five in English and maths, research from the department shows.
Phillipson will highlight variations in attendance across the country in an address to around 1,000 school and college leaders at the Association of School and College Leaders (ASCL) annual conference in Liverpool.
She is expected to say that one in five children is persistently absent and that while some schools are “doing really well”, others are “not making enough progress”.
“And I won’t accept the damage that does to those children,” the minister will say. “I expect schools to catch up – fast.
“And I know that’s what schools want too, what you are all working so hard to do.
“The way we turn this around is through collaboration, partnership and, if we’re honest, old-fashioned graft.”
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