Reeves rules out tax rises but confirms £2,000,000,000 in civil service cuts

The UK chancellor has categorically ruled out raising taxes in next week’s spring statement.

Rachel Reeves has promised not to take more money from people’s purses while instead confirming sweeping cuts in civil service running costs.

The government has announced large scale welfare cuts and saving measures as Reeves has refused to budge from her fiscal rules, which rule out borrowing to fund day-to-day spending

This has piled pressure on the chancellor to balance the books amid disappointing growth figures and higher-than-expected borrowing.

Reeves was grilled by Laura Kuenssberg (Picture: Jeff Overs/BBC/PA Wire)

She told Sunday with Laura Kuenssberg: ‘The fiscal rules are non-negotiable.

‘I am determined to bring back growth. That is the prize on offer – world class public services without asking working people to pay more.

‘I made a commitment during the election not to increase the key taxes that working pay people. Their income tax, their national insurance and their VAT.

‘These are promises I stuck with during the budget last year.

‘You cannot do everything overnight and we do need to do more.

‘There are always going to be costs for everything you make but there are also costs for irresponsibility.’

Reeves has put growth at the centre of her economic agenda (Picture: REUTERS)

Reeves was even more explicit in an interview with the Sun on Sunday, pledging: ‘This is not a Budget. We’re not going to be doing tax raising.’

Instead of tax rises, Reeves has promised extensive cuts to the running costs of government departments.

She confirmed these would total 15% by the end of the parliament in 2029, accounting to £2 billion worth of savings.

The Cabinet Office will order departments to slash their administrative budgets by 10% by 2028-29 to save £1.5 billion a year.

This will then rise to 15% the year after, which is expected to save £2.2 billion a year.

The head of the FDA union said this equates to nearly 10% of the salary bill for the civil service.

Reeves added this morning: ‘We are going to cut the back office functions and the bureaucracy.

Reeves will tell her cabinet colleagues to make large administrative spending cuts (Picture: /House of Commons/AFP via Getty Images)

‘If we can realise those benefits, it means we can invest more in people working on the front lines, whether that is teacher in our schools or police on our streets.’

The chancellor also defended accusations that the Labour government were bringing back austerity amid a backlash to welfare cuts announced this week.

Experts estimate around a million people in England and Wales will lose their disability benefits as part of a welfare overhaul to save £5 billion a year by the end of the decade.

Reeves said: ‘I have put £100billion more into capital spending than the previous government.

‘We put more than £20billion into the National Health Service.

‘That is a far cry from what we have seen from the Conservative governments in the last 14 years.’

Liz Kendall announced a drastic welfare overhaul this week (Picture: Thomas Krych/ZUMA Press Wire/Shu)

‘On welfare, the system is in bad need of reform.

‘One in eight young people are not in employment, education and training. I am not willing to write an entire generation of young people.’

‘For people who need support we will continue to protect them. We have said there should be enhanced support for the most disabled.

‘I want more people to have the support to get in to work. I want to give people the dignity and pride that comes from work.’

The spring statement comes after the Bank of England reduced its forecasts for growth this year.

Her calculations were also dealt a blow by figures showing that government borrowing had soared by £4.2 billion past initially forecasts to £10.7 billion.

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