Keir Starmer said Britain’s welfare system cannot be defended “economically or morally” as he prepares to slash the ballooning benefits bill. The Prime Minister insisted that failure to take action would see costs hitting £70 billion a year.
His remarks came as Sir Keir braces for the biggest rebellion of his premiership with dozens of Labour MPs angry at his plans to save up to £6 billion.
Chancellor Rachel Reeves will deliver her spring statement on March 26, with increased borrowing costs and weak economic growth likely to require spending cuts in order to meet her commitments on managing the public finances. Curbing the cost of welfare is expected to be among moves to contribute to savings. The bulk of the savings are likely to come from making it harder to get personal independence payments (PIPS), while disability handouts could be frozen in cash terms.
However ITV News reports today that there could also be a consultation on measures to protect a small group of the most disabled people who receive PIPs.
Speaking on a visit to Hull Sir Keir said: “The welfare system as it’s set up can’t be defended. On economic terms or moral terms.
“Economically the cost is going through the roof, so if we don’t do anything the cost of welfare is going to go to £70 billion a year. That’s a third of the cost of the NHS, that’s more than the Home Office and our prisons combined. So, we’re making choices here.”
He added: “We have basically set up a system which says if you try the journey from where you are into work and anything goes wrong you’ll probably end up in a worse position than when you started.”
Sir Keir said it was “really shocking” that one in eight young people are “stuck in a world of benefits and support” rather than being in work or training.
“That’s not defensible. So, it’s got to change. We’ve got to reform it.”
In a bid to avoid a damaging showdown with MPs and peers, Downing Street began inviting groups of Labour backbenchers to meetings on Wednesday, stressing the “moral case” for changes designed to get people back to work as they made the case for painful changes.
It is understood that dozens of MPs have urged the government to think again.
Many are particularly concerned that Rachel Reeves is set to go further than the former Tory chancellor George Osborne who, despite cutting working-age benefits for four years, kept the personal independence payments (Pip) rising.
Under current plans, the bulk of almost £6bn of cuts will come from the Pip, which is not linked to work. Eligibility criteria for the key disability benefit will be tightened, while some Pip payments are expected to be frozen. Despite some early speculation, the benefit will not be means tested.
There are also expected to be smaller cuts including raising the basic rate of universal credit for those looking for – or in – work, while cutting it for those judged as unfit for work, as an incentive for some disabled people to seek employment.
Some regular reassessments for benefits are now likely to be carried out in person, rather than over phone, which officials view as too lax. Others will continue remotely.