Rishi Sunak lays out his five key reforms to welfare
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Prime Minister Rishi Sunak's five key promises
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Labour is on course to breach the annual welfare spending cap by a whopping ￡8.6 billion, the welfare secretary Liz Kendall confirmed this afternoon in a humiliating statement to parliament.
Ms Kendall revealed that the Office for Budget Responsibility (OBR) has made a formal assessment of government benefit spending, and has found taxpayers on on course to breach the previous government’s 2024/25 cap by nearly ￡9 billion this year.
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The news comes amid a ballooning spend on Universal Credit and disability benefits, something Labour is blaming on the previous Tory government despite Rishi Sunak’s now-scrapped plans to slash welfare spending on those using mental health as an excuse not to work.
Ms Kendall revealed that as a result of the OBR’s forecast she is now being forced to reduce spending by the ￡8.6 billion figure, or to justify why the breach is taking place.
Despite Rachel Reeves demanding cuts to the welfare budget in order to stabilise recent market turmoil, Ms Kendall’s statement argues that she will not implement the massive spending reduction in order to fall within the cap.
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READ MORE: Rachel Reeves announces plan to slash DWP sickness benefits 'in weeks'
Liz Kendall was forced to make the confession this afternoon (Image: Getty)
She writes: “Whilst this Government has already shown that it will not shy away from difficult decisions, this breach could only have been addressed through implementing immediate and severe cuts to welfare spending. This would not have been the right course of action.”
In recent weeks it’s been reported that Rachel Reeves and the Treasury is already growing frustrated with the Welfare Secretary’s lack of progress coming up with changes and cuts to the benefit bill.
A fortnight ago The Sun claimed Downing Street advisors are “pulling their hair out” over the sluggish speed at which Ms Kendall is working towards the cuts.
It comes after Ms Reeves committed to ￡3 billion in welfare cuts before the next general election.
Speaking in the Commons this afternoon, shadow welfare secretary Helen Whately conceded that the country’s welfare bill had gone up too much under the previous government.
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Helen Whately insisted Rishi Sunak had a plan for ￡12bn of cuts (Image: Getty)
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She confessed: “I’m not going to shy away from telling the truth, in the last few years during and since the pandemic, things changed. While the number of jobs kept going up, the number of people economically inactive also started to go up and with that the welfare bill.”
“Of the 9m people of working age defined as economically inactive, 2.5 million of them are not working because of ill health.
“That includes growing numbers of young people starting out on a life in benefits instead of a life with a career.
“In government we were working flat out to tackle it.”
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She pointed out the Tories had worked out a way of cutting ￡12 billion from the welfare bill by reforming sickness benefits, however did not have time to implement the plan before losing the election.
A Government spokesperson said: “This unavoidable breach of the welfare cap – predicted by the OBR in March 2023 - is yet more evidence of the broken welfare system we inherited, which for years has failed in its duty to support millions of people into work and instead resigned them to a life on benefits putting huge strain on the British taxpayer.”
“That’s why we are taking immediate action to turn things around with the biggest employment reforms in a generation so people who can work, are supported into a good job, while our health and disability benefits reforms in the Spring will build a system that is work-focused, supports those who need it, is fair on the taxpayer, and helps us kickstart economic growth – a key part of the Plan for Change.”