Rachel Reeves will go on Davos charm offensive as plan for cuts rattles nerves at home
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The chancellor will seek investment in the UK as the Labour government prepares to reduce the benefits bill. A drive to reduce the benefits bill will be pursued by the government alongside a charm offensive to attract more companies to invest in Britain, amid nervousness in Labour circles over a new round of spending cuts.
The chancellor, Rachel Reeves, will travel to the World Economic Forum’s annual meeting in Davos this week in the hope of convincing some of the world’s largest companies to invest, with allies saying she will use spending cuts rather than further tax increases to meet her own fiscal rules.
However, in a move that is causing nervousness among Labour MPs, a push to cut the benefits bill is also being lined up. Keir Starmer has already said the government will be “ruthless with cuts” if they are needed. Darren Jones, the chief secretary to the Treasury, is set to give a speech on the Treasury’s approach this week.
The news comes with the government backing a package designed to crack down on fraud in the benefits system, with new laws clawing back money wrongfully claimed. Officials say the drive will save £1.5bn over the next five years. Ministers said they had inherited a “broken” welfare system in which fraud and error was costing the taxpayer almost £10bn a year. “We want to spend less on welfare as a government and as a country,” said a Downing Street source. “We should want to spend less on welfare, because we should want more people in work. We want more homes built so that people spend less on housing benefits. Above all else, Rachel has been very clear we will keep within our fiscal rules.”.
