Starmer says benefit system unfair and indefensible

Sir Keir Starmer has called the current welfare system "unsustainable," "untenable," and "unfair," stating that the government cannot "stand back and ignore it." He emphasized the government's responsibility to take action on this issue, rather than turning a blind eye.

Speaking to Labour MPs on Monday evening, the Prime Minister pointed out that the current welfare system is "the worst of all worlds," hindering people from working while also leading to "spiraling bills." He argued that this system fails to effectively incentivize employment and instead exacerbates the financial burden.

Labour's Shadow Work and Pensions Secretary, Liz Kendall, is preparing to unveil reform plans for the welfare system in the coming weeks, including cuts to welfare spending. This move aims to address the challenges facing the welfare system and ensure fiscal sustainability.

However, there is unease within the party regarding these plans. Labour MP Rachel Maskell warned against "draconian cuts," as they could "push disabled people into poverty." Maskell told the BBC that she has sensed "deep unease" among Labour MPs. She stated, "Looking back at Labour’s record in this area, I believe we can hold to our values and make sure we are helping people, not harming them."

Another Labour MP, Neil Coyle, also expressed concerns, telling Newsnight: "If we are going to make poor people poorer, there will be some MPs who won't accept that. This feels like austerity all over again, and I'm worried about that."

But other sections of the parliamentary Labour party are calling for change. The "Make Britain Work" group, comprised of 36 Labour MPs, said the government has a "moral duty" to help people with long-term illnesses and disabilities to work where they can. In a letter to Kendall, the MPs said the country faces "difficult choices" to overcome an "economic inactivity crisis."

Sir Keir Starmer told the meeting of Labour MPs on Monday evening: "We find ourselves in the worst of all worlds – incentives are wrong – holding people back from work, taxpayers footing the bill for spiraling costs. A generation is being wasted, one in eight young people are not in education, employment or training, and those who genuinely need the safety net still aren’t getting the dignity they deserve. It’s unsustainable, it’s untenable, it’s unfair, and people feel that in their bones."

"So this needs to be our offer to the country: if you can work, we will make work pay – if you need help, the safety net will be there for you. But this is Labour – we believe in the dignity of work, we believe in the dignity of every worker."

Many MPs leaving the meeting said they were reassured by the Prime Minister's words. One MP said they accepted welfare reform had to happen and were reassured that the Prime Minister said it had to be done with Labour values and through the dignity of work. However, another MP said constituents were frightened and needed to know support would be there. They said there was little recognition that reducing benefits such as personal independence payments could drive up costs, as personal independence payments help people stay independent.

In a letter to Reeves, a dozen charities argued that "there is little evidence that cutting benefits increases employment outcomes." The charities – including Disability Rights UK, Citizens Advice, Scope, and Sense – urged her to "reconsider cutting disability benefits." They said: "Some disabled people who are out of work want to work with the right support in place. For some disabled people, work is not appropriate. Changes to benefits must start here. Not with cuts."

But ministers are concerned about the surge in welfare claims since the Covid pandemic and the cost to the taxpayer. As of January, 9.3 million people in the UK aged 16 to 64 were economically inactive – an increase of 713,000 since the pandemic. The Department for Work and Pensions said around 2.8 million people are economically inactive due to long-term sickness. Last year, the government spent £65 billion on sickness benefits, and that figure is projected to increase by tens of billions before the next general election.

Some reforms to the welfare system include plans to use 1,000 work coaches to help the long-term unemployed find jobs. In the letter, the "Make Britain Work" group said the cost of unemployment among people with long-term illnesses and disabilities "goes far beyond economic necessity." "It is a moral duty," the letter said. The letter said the group – most of whom were first elected in the 2019 general election – was formed to "drive fundamental change to our welfare system to support work." "We believe that reforming our broken system is not only necessary but a genuinely progressive cause," it said.

Conservative Shadow Home Secretary Chris Philp told Sky News on Sunday that too many people are being signed off as sick. He said the welfare system needs to become more rigorous and suggested it was too easy for people to get benefits. "I think it has gone too far, costing us billions of pounds every year," he said.