LONDON, March 18 (Reuters) - Britain's Labour government will unveil plans on Tuesday to reduce the funding allocated to supporting individuals with disabilities and chronic health conditions, aiming to address dissent within some of the party's lawmakers.
These reductions precede a fiscal statement on March 26, which is anticipated to be a pivotal moment in fulfilling pre-election pledges to restrict tax hikes and closely manage borrowing, given lower-than-expected revenues.
Ministers are employing various measures to stimulate economic growth and curtail expenditures, striving to adhere to their self-imposed target of balancing day-to-day public spending with tax revenues by the end of the decade.
The welfare budget, surpassing the national defense budget and projected to exceed 100 billion pounds ($129 billion) by 2030, is likely to endure significant cutbacks.
Finance minister Rachel Reeves noted to Reuters on Monday, "I don't think anyone believes that the current system is working. It's not benefiting individuals reliant on benefits, who often find themselves stuck in that system rather than receiving the necessary assistance to re-enter the workforce...and simultaneously, it's not advantageous for taxpayers."
The proposed changes are scheduled to be formally disclosed in parliament later today, sparking worries within sections of the Labour Party about the potential allocation of 6 billion pounds ($7.79 billion) in cuts.
Notably, last year's controversial move to alter benefits for some pension-age Britons triggered a fierce internal debate within the party. Prime Minister Keir Starmer's administration has refuted claims of echoing the austerity measures implemented by the previous Conservative-led government after the global financial crisis, which Labour holds responsible for several of Britain's enduring economic challenges.
($1 = 0.7704 pounds)