RACHEL Reeves was today accused of taking a “reckless” approach to the finances with 1970s-style high tax and spend.
Tory Mel Stride said the Chancellor’s decisions have seen businesses “crushed on the altar of her ineptitude”.
The Shadow Chancellor seized upon grim forecasts slashing this year’s growth from 2 per cent down to just 1 per cent.
He blamed the sluggish economic outlook on her tax bombshell on firms and hiked spending.
Reacting to the Chancellor’s Spring Statement, Mr Stride blasted: “She borrowed and spent and taxed like it was the 1970s.
“The Chancellor likes to tour the television studios and tell everybody they should be thankful that she will not be ramping up taxes in this ’emergency budget’ as she did before.
“But that will be cold comfort to the millions up and down the country waiting in fear and trepidation for the start of the new tax year, buckling under the burden of tax that’ll be rising to the highest tax burden on her watch in the history of our country.”
Pointing to her £40billion National Insurance hikes, Mr Stride said: “She taxed jobs and wealth creation, she’s destroyed livelihoods, businesses clobbered big and small, small companies – the backbone of our economy, enterprise – crushed on the altar of her ineptitude.”
Ms Reeves today announced a further round of welfare cuts of around £500million today to help balance the books.
She said Britain would be in a £4.1billion black hole by 2030 if she did not act, but would now have a £10billion surplus.
The Chancellor told MPs: “We believe that if you can work, you should work – and if you can’t, you should be properly supported.”
Measures announced earlier this month – including restricting those eligible for health benefits – were expected to save the government £5billion.
But the Office for Budget Responsibility has since warned they will only save around £3.4billion – leaving the Chancellor fishing around for more money.
The revised package will see Universal Credit incapacity benefits for new claimants frozen at £50 per week until 2030 rather than increased inline with inflation.
And the basic rate of Universal Credit will be £106 per week by 2030, cut from £107 under the recently-announced plans.
Ms Reeves’ predicament has been worsened by a flatlining economy that is forcing her to make swingeing spending cuts.
Her gamble on driving strong economic growth to pay for her plans will be skewered by the OBR, who said GDP will now only increase by 1 per cent this year rather than 2 per cent.
She said her spending cuts – the full extent will be revealed this summer – will reinstate a £10billion buffer by the next election.
Ms Reeves said: “There are no quick fixes. But we have taken the right choices now.
“Returning stability to our economy after years of mismanagement by the party opposite. Delivering security for our country and security for working people.
“That is what drives this government. That is what drives me as Chancellor. And that is what drives the choices that I have set out today.”
An impact assessment will also be published today which is expected to say the poorest households across Britain will be the hardest hit.
These measures join a number of other cuts to the UK’s welfare system.
The key changes include:
- Merging jobseekers’ allowance and employment support allowance, where people who have worked get more than those who have not
- Scrapping the Work Capability Assessment by 2028, with all health payments made via PIP in future
- Under-22s to be banned entirely from claiming Universal Credit incapacity benefits
- An above-inflation rise to the standard allowance of Universal Credit, but the highest incapacity payment cut
- A much higher bar for people to claim Personal Independence Payments to save £5billion a year
- A “right to try” scheme that allows jobless Brits to have a go at working without losing their benefits if they cannot manage.