Keir Starmer last night vowed to press ahead with benefit cuts as he branded the welfare system ‘unsustainable, indefensible and unfair.’
The Prime Minister tried to defuse a growing Labour rebellion over the issue by warning that failure to address welfare reform risked creating a ‘wasted generation’.
Rachel Reeves is looking to slash £6 billion off the benefits bill this month to help balance the books. Ministers are also looking at longer term reforms designed to curb a sickness benefits bill forecast to hit £70 billion by the end of the decade.
Addressing Labour MPs behind closed doors last night, the PM said: ‘We’ve found ourselves in a worst of all worlds situation – with the wrong incentives – discouraging people from working, the taxpayer funding a spiralling bill, £70 billion a year by 2030.’
He said one in eight young people were now not in education, employment or training, adding: ‘That’s unsustainable, it’s indefensible and it is unfair, people feel that in their bones.
‘It runs contrary to those deep British values that if you can work, you should. And if you want to work, the government should support you, not stop you.’
Sir Keir told his MPs that voters ‘want the status quo to be challenged’, as he vowed to be ‘ruthless and bold’ in driving through reforms.
His intervention came amid a growing Labour backlash over plans to balance the books by cutting benefits.
Sir Keir branded the welfare system ‘unsustainable, indefensible and unfair’, saying that failure to address reform risked creating a ‘wasted generation’.
Rachel Reeves is looking to slash £6 billion off the benefits bill this month to help balance the books
Labour sources say dozens of MPs are urging Rachel Reeves to change her ‘fiscal rules’ this month i to allow more borrowing and avoid cutting welfare.
Former frontbencher Rachel Maskell said the Chancellor should adopt ‘a carrot approach, not a stick approach’. She added: ‘We’ve got to make the right interventions and that doesn’t start with the stick.’
Asked about the mood among Labour MPs about the prospect of welfare cuts, she told the BBC: ‘All I have picked up is deep, deep concern and that’s clearly reflected from the stories we’re hearing from our constituents.’
Fellow Labour MP Neil Duncan Jordan said that cutting benefits would be ‘disastrous’ and urged the Chancellor to ‘tax the super-rich instead’.
Former Labour chancellor John McDonnell warned that welfare cuts would ‘cause great hardship and suffering,’ adding: ‘This is not what any Labour government was elected to do.’
Ministers are looking at long term reform of the benefits system as well as short term cuts as they try to bring the ballooning benefits bill under control.
Ms Reeves is seeking £6 billion in cuts this month after stuttering growth and rising government borrowing costs put her on course to break the fiscal rules she set out in October’s Budget.
Labour MP Neil Duncan Jordan (pictured) said that cutting benefits would be ‘disastrous’ and urged the Chancellor to ‘tax the super-rich instead
The benefits bill has been rising and is forecast to continue going up
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Measures under consideration include freezing Personal Independence Payments and making it harder to qualify for them. But the savings are unlikely to even offset the forecast growth in PIP spending, which is predicted to jump by more than 50 per cent in the five years to 2028, rising to almost £33 billion.
Universal Credit payments to those out of work could be cut to fund increases to those who have a job.
Charities warned that squeezing disability payments would have a ‘catastrophic impact’.
In a letter to the Chancellor, more than a dozen charities said there was ‘little evidence to suggest cutting benefits increases employment outcomes’.
The signatories, who included Citizens Advice, Scope and Parkinson’s UK, urged Ms Reeves to ‘think again about cuts to disability benefits’.
‘There are disabled people out of work who want to work given the right support. And for some disabled people, work isn’t appropriate,’ they wrote. ‘Changes to welfare must start here. Not with cuts.’
They pointed to analysis by Scope suggesting that more than 700,000 people could be pushed into poverty if they lose their PIP payments.
