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Keir Starmer has delivered an extraordinary condemnation of the current welfare benefits system, calling it “unsustainable, indefensible and unfair”.
He was speaking at a private meeting of Labour MPs as the Government is poised to announce major cuts in benefits payments.
Sir Keir’s comments mark one of the strongest condemnations of the welfare system ever delivered by a Labour prime minister and signals the biggest overhaul of the system since Iain Duncan Smith’s reforms to create universal credit in 2010.
He warned that the bill for people of working age on long term sickness and disability benefits will hit an eye watering £70 billion by 2030.
His speech comes ahead of chancellor Rachel Reeves’ spring Budget on 26 March where she is set to announce cuts to benefits.
This is based on estimates that the current number of claimants of working age – 2.8 million – will rise to 4 million by the beginning of the next decade.
Sir Keir is gambling on hopes that a bold move early in his government will not fuel a Labour revolt over plans to slash the benefits bill as it seeks to find extra cash for the defence budget.
And the reception of his speech from Labour MPs last night appeared to suggest that he had faced down potential critics for now.
Sir Keir 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, £70bn a year by 2030.
“A wasted generation. One in eight young people not in education, employment or training and the people who really need that safety net still not always getting the dignity they deserve.
“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.”
But critics within the party claim that they are being literally locked out of the debate and prevented from engaging with the leadership.
Veteran leftwing Labour MP Diane Abbott was prevented from entering the PLP meeting on Monday night.
Posting on X, formerly Twitter, she said: “I would have liked to query Keir Starmer at last night’s meeting of the Parliamentary Labour Party about the impact of his proposed cuts to welfare. Unfortunately I and other colleagues were told the meeting was full. Keen on dissent in other countries. Not so much here.”
Green Party co-leader Carla Denyer said the government was engaging in “cruelty for cruelty’s sake”. “Either this government has lost sight of the people it was elected to serve, hundreds of thousands of whom are at this very moment terrified that the support they rely on will be pulled out from under them – or they have decided that they no longer care,” she said.
Ms Denyer added: “Every single MP must search their conscience and decide if they are prepared to vote to push already vulnerable people into poverty and insecurity – and I hope that none will, when these plans come before parliament.”
Meanwhile, think tanks have warned that Sir Keir and chancellor Rachel Reeves will need careful reform to make savings rather than just slashing payments.
Louise Murphy, senior economist at the Resolution Foundation, said: “Britain is getting older and sicker as a nation. The consequence is a fast-rising working-age incapacity and disability benefits bill, which is on track to rise by £32 billion a year over the 2020s.
“The benefit system can’t fix these problems on its own, but a focus on the three areas that drive higher spending – entrances, entitlements and exits – could stem the increase and help more people into work.
“Rather than focus solely on restricting eligibility for support, reforms should reduce the financial gap between basic and health-related out-of-work benefits that incentivises health-related claims. Far more can be done to boost exits too, which will require investment in the functioning of the benefit system and rebuilding trust among claimants.
“While the Government is keen to score short-term welfare savings ahead of the 26th March, truly effective reforms will take time to deliver.”
Downing Street on Tuesday said “the broken welfare system is in need of reform” ahead of the planned cuts to health and disability benefits.
“With 3 million people out of work for health reasons, one in eight young people currently not in work, education or training, this is letting young people down and holding back the economy,” Sir Keir’s official spokesman said.
The PM’s spokesman refused to put a figure on how much the government would cut the benefits bill by, but said the focus “is on people being trapped out of work into a life of unemployment that are not getting the support they need”.
