0:00
rachel Reeves has confirmed what had
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been rumored for a while that the
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government is U-turning on its
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politically toxic cuts to winter fuel
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payments but the government has spent
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more than six months justifying the cuts
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on the basis of trimming down government
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spending so now the leadership has lost
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the standoff with Labour backbenches how
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exactly is the Treasury going to pay for
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it a spending review on Wednesday the
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11th of June will set out plans for how
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much is spent on each department it has
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been suggested that the government could
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revise funding pledges on housing
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policing and education in order to keep
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public finances in check think tanks
0:39
have argued for targeted policies to
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protect the public purse the Tony Blair
0:43
Institute has argued that the government
0:45
could yield 11 billion pounds in savings
0:47
from investment in AI and the Institute
0:49
for Fiscal Studies has said that tough
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choices on Wednesday are unavoidable
0:54
that's because Treasury officials will
0:56
be looking at how they can meet their
0:57
own fiscal rules which is to deliver a
1:00
current budget balance on a rolling
1:02
three-year forward-looking period the
1:05
other rule is to lower the level of net
1:07
financial liabilities in these terms
1:10
every billion or million pound extra of
1:13
government spending can count a great
1:15
deal 2 billion pounds on winter fuel
1:17
payments may not seem like a lot given
1:20
the size of the UK economy but
1:22
Chancellor Rachel Reeves is struggling
1:24
to manage more deeprooted problems in
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the UK the UK national debt stands at
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around 2.8 trillion pounds and could yet
1:32
rise closer to 100% of total GDP by 2030
1:37
due to high guilt yields and raised
1:39
interest rates the cost of servicing
1:41
debt is now around a hundred billion
1:43
pounds around double the defense budget
1:45
and if government spending on defense is
1:48
set to increase from 2.3% as a share of
1:50
UK GDP to as much as 3.5% in the next 10
1:54
years then more savings will have to be
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found and growth will have to surge if
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Reeves cannot find quick savings on
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Wednesday taxes may have to go up income
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tax thresholds could be frozen for
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longer than Reeves said last autumn
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which could drag millions more people
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into paying more reeves has not ruled
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out this tax rise and little has been
2:16
said on other potential tax hikes
2:18
proposed by the deputy prime minister
2:21
Angela Raina this includes extra taxes
2:23
on wealth shares listed on a junior
2:26
stock market and reinstating the
2:28
pensions lifetime allowance businesses
2:31
complain the 20 billion pound tax rate
2:33
on employers announced last autumn has
2:35
damaged UK growth prospects and they
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could raise more concerns as other taxes
2:40
kick into effect prime Minister Kier
2:42
Stalmer has said himself the government
2:44
cannot tax its way to growth for
2:47
everything you need to know about this
2:48
story as it develops head to cityam.com
