The upcoming vote on the Government's welfare bill is critical, with estimates predicting a cumulative saving of £13.7 billion by 2029/30 if changes to incapacity and disability benefits are enacted. Failing to pass the bill may lead the Chancellor to face difficult fiscal choices, such as cutting expenditures or raising taxes, to comply with her fiscal rules. Establishing consistent policies and a larger fiscal buffer is essential to instill confidence and avoid prolonged economic uncertainty resulting from inadequate policy adjustments.
According to OBR estimates, the cumulative saving of the changes to both incapacity benefits and disability benefits will total £13.7bn by 2029/30.
If the Government is unable to pass this bill, the cost would be large enough to erase the narrow £9.9bn headroom against the Chancellor's Stability Rule.
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