𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves has been warned that the UK faces a financial crisis, the like of which has not been seen since the 1970s. Reform UK board member Gawain Towler told our podcast The Daily Expresso that spending increases and tax increases will result in a “reckoning” for the Chancellor. The House of Commons Library said in February that the Government’s economic plans represent “significant increases in funding in areas such as health, defence and regional development”. Ms Reeves hiked national insurance contributions for employers at her Budget last October. She is widely expected to increase taxes further in November.

Mr Towler said regarding the need to cut welfare spending: “It’s going to be very, very hard indeed. But I do think that as we get closer to the election and the financial mishandling and mismanagement of this government, the fact that we’ll keep on spending increases and tax increases, there will come a reckoning, and that has to come, a reckoning.” Sir Mel Stride was right to say during a speech at the Tory party conference, he told podcast host JJ Anisiobi, that you “can’t continue spending more than you’ve got”.

“If you’re getting a hundred quid and you’re spending a hundred and twenty five quid every year, you very soon stop. People very soon stop lending you money. And when you’ve got people like Andy Burnham saying the bond market doesn’t matter. Oh boy. And they accuse us of being odd.”

Mr Towler called the Mayor of Greater Manchester’s stance “truly off the wall”. He added: “So with the with the national debt and deficit, and guilts and bonds are going in the wrong direction, we are facing a serious financial crisis. And people are already talking about the IMF concept, and this this hasn’t been since the 70s.”

Nigel Farage’s former adviser, said: “I think as the next few years of increased costs, be it on energy, be it just tax, be it on business, be it on employment, the NIC increases, and all the rest of this, I think the country will accept in its voting that massive change has to take place.

“And whilst there will be pain, and whilst there will be upset, I think that the we’re going to break if we don’t do this.”

Mr Towler mentioned that during the COVID-19 there was a £20 per week universal credit uplift.

“It was very much a limited, temporary uplift,” he said. “It was said so very clearly at the time.”

There was “screaming” after officials tried to remove it, Mr Towler suggested, as people thought they were “entitled to it”.

He added: “If that was the screaming on a very, very specific, very time limited, small amount of money, and there was a huge amount of fuss, the very idea that you’re going to be able to remove far more significant benefits is for the birds.

“Unless you have that strength of purpose, that absolute commitment to the delivery. And I think Mel Stride’s words are very fine, but it’s jam without the bread, and I don’t think it’s going to it’s going to work.”

Sir Mel set out plans to cut £47billion from public spending by restricting welfare payments, shrinking the Civil Service, and slashing aid spending.

The proposals would see people with “less severe” mental health problems offered treatment rather than benefits, with Sir Mel saying this would help them to “a better life”.

He also said a future Conservative government would make savings by restricting benefits to UK citizens, although during media interviews on Monday morning he admitted that EU nationals with settled status would also be eligible for welfare.

The policy would apply to those with indefinite leave to remain or limited leave to remain and the savings calculated by the party take into account that those with EU settled status would not be affected, it is understood.