Labor to introduce 'own reforms' to benefits system to save £3bn

Labor will introduce its “own reforms” to the benefits system to make £3bn worth of cuts, rather than sticking to Tory plans, a minister has suggested.

Instances Radio asked Work and Pensions Minister Alison McGovern why the Labor Party was pressing ahead with the previous Conservative government's plans to change work capacity rules.

The Daily Telegraph reported on Friday that the government planned to cut £3bn from the welfare bill by restricting access to sickness benefits, respecting the Conservatives' proposals to save over four years by changing the assessment of work ability.

McGovern said: “Like all departments, the Department for Work and Pensions has to save because we are in a horrible financial situation. “To be clear, at that point we will introduce our own reforms because the last 14 years have been a complete failure when it comes to employment.”

Asked if this meant there would be no cuts, he added: “We will not go ahead with the Conservative plan because it was theirs. “We will need to save like all departments, but we will promote our own reforms.”

In the run-up to the government's first budget on October 30, speculation and leaks are rife about the new administration's plans for spending and taxes, such as changes to stamp duty, capital gains tax and taxes on vaping.

Last week it emerged that the chancellor, Rachel Reeves, aims to raise £40bn through tax rises and spending cuts in the budget. Shortly after Labor came to power, he claimed the previous government had left a £22 billion deficit in the public finances and said there would be “painful” decisions ahead.

The BBC reported on Friday that the government planned to increase the amount of money it collected in inheritance tax. There's no telling how many people are likely to end up paying more, or how much more they would pay.

The Prime Minister and Chancellor are understood to be considering changes to the tax, which now includes several exemptions and reliefs.

Inheritance tax is charged at 40% on the property, possessions and money of someone who has died, above a threshold of £325,000. It raises around £7bn a year and around 4% of deaths result in an inheritance tax charge.