 "Labour trailing Reform UK in polls, Reeves to announce jobs guarantee to youths")
As the Labour Party trails behind Reform UK in numerous surveys, British Finance Minister Rachel Reeves vows to guarantee jobs for the unemployed in the United Kingdom. Reeves will be stirring the headlines to boost Labour’s ratings as she prepares to raise taxes in the November budget.
After the first year in power, which was marred by mistakes and resignations, the Labour Party is trailing behind Nigel Farage's Reform UK Party in surveys. UK Prime Minister Keir Starmer’s government is also facing significant pressure to improve living standards without breaking its self-imposed fiscal discipline.
According to Reuters, on Monday, Reeves will announce that every young person who receives Universal Credit benefit payments for 18 months without “earning or learning” will be guaranteed an offer of paid work. However, it is immediately not clear what that work would be and how Reeves is planning to make it happen.
“I can commit this government to nothing less than the abolition of long-term youth unemployment,” Reeves will tell Labour‘s annual conference, according to advance extracts of her speech.
Reeves faces pressure from within
Meanwhile, both Starmer and Reeves are facing pressure within the party’s left wing to find money for measures such as tackling child poverty. However, the British chancellor of the exchequer has vowed to stick to a pledge to balance the day-to-day budget by 2029, wary of putting large investors off buying or holding UK debt.
Some Labour lawmakers also want to end a cap that limits child benefits to two children only, which would cost some £3.5 billion a year. It is pertient to note that Starmer has already reversed cuts to disability support and fuel subsidies that would have saved about £6 billion a year.
In her first budget after coming to power, Reeves announced the biggest tax increases in 30 years of the country’s history. However, more rises are possible as she prepares to announce the budget on November 26, Reuters reported. What is also noteworthy is the fact that the Government borrowing costs are already elevated; the 30-year UK gilt yield hit its highest since 1998 in early September.
Impact Shorts
More ShortsDespite being the fastest-growing economy among the G7 nations, Britain’s economy is forecast to expand by less than 1.5 per cent in 2025, and inflation looks likely to hit 4 per cent in September, double the Bank of England’s target.
With inputs from Reuters.
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