Keir Starmer will hit out at a ‘poverty of ambition’ as he once again sets his sights on welfare spending – as Rachel Reeves battles accusations that she misled the public before the Budget
Keir Starmer will lash out at a “poverty of ambition” as he once again targets the benefit system – while Chancellor Rachel Reeves insists she did not lie about the state of public finances.
The Prime Minister will vow to reform welfare in a major speech in central London – saying “any Labour Party worthy of the name” cannot ignore the wasted potential of “trapped” young people.
Last week Ms Reeves unveiled a Budget which tore up the two-child benefit limit, a move expected to lift nearly half a million children out of poverty. The PM will say that having made that vital step, there will now be a renewed focus on tackling problems in the benefit system.
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He is expected to say: “We have to confront the reality that our welfare state is trapping people, not just in poverty, but out of work. Young people especially.
“And that is a poverty of ambition. And so while we will invest in apprenticeships and make sure every young person without a job has a guaranteed offer of training or work.”
And he is expected to add: “We must also reform the welfare state itself – that is what renewal demands. Now this is not about propping up a broken status quo.
“Nor is it because we want to look somehow politically ‘tough’. The Tories played that game and the welfare bill went up by £88billion.
“They left children too poor to eat and young people too ill to work. A total failure.” He will add that the shake-up will not be about “propping up a broken status quo” – saying: “No, this is about potential.
“Because if you are ignored that early in your career, if you’re not given the support you need to overcome your mental health issues, or if you are simply written off because you’re neurodivergent or disabled, then it can trap you in a cycle of worklessness and dependency for decades.
“Which costs the country money, is bad for our productivity, but most importantly of all – costs the country opportunity and potential. And any Labour Party worthy of the name cannot ignore that.”
Last summer the Government was forced to abandon cuts to the personal independence payment (PIP) disability benefit after a huge backbench rebellion. It comes as Ms Reeves faces a storm after indicating in a speech on November 6 that she was facing a black hole.
On Friday it emerged forecasters the Office for Budget Responsibility (OBR) said it had predicted she would actually have a small surplus in the days before her statement.
Asked by Sky News host Sir Trevor Phillips whether she had lied, she replied: “Of course I didn’t.” She said the surplus would have been £4.2billion – down from £9.9billion in the Spring – which Ms Reeves said would not have been enough of a buffer for the national coffers.
In her Budget on Wednesday, Ms Reeves said everyone would have to do their part as she announced £26billion of tax rises.
She said she had been “honest and frank about that” at the start of November. On Sunday Tory leader Kemi Badenoch called on Ms Reeves to resign.
But the Chancellor promised to defy her critics – saying her decisions would drive down waiting lists, take money off energy bills and address child poverty.
She said: “I said when I became Chancellor I would judge my time in office as a success if there were more ordinary children from working class backgrounds living fulfilling lives.
“And lifting half a million kids out of poverty achieves exactly that. That is what I believe, and that is what my party believes .”
Ms Reeves added: “I said in that speech (on November 6) that I wanted to achieve three things in the Budget: tackling the cost of living, which is why I took £150 off off energy bills and froze prescription charges and rail fares.
“I wanted to continue to cut NHS waiting lists, which is why I protected NHS spending, and I wanted to bring the debt and the borrowing down, which is one of the reasons why I increased the headroom of £4billion.
“The headroom would not have been enough, and it would not give the Bank of England space to continue to cut interest rates.”
Vowing to take on her critics, Ms Reeves said: “I have been underestimated all my life. As a young girl, from an ordinary background people make assumptions about me.
“And I’ve defied them before, and I will defy my critics again. I’m proud of my Budget this week. I’m proud that I’m taking money off of energy bills, I’m proud I’m reducing NHS waiting lists, proud that I’m cutting child poverty.
“I’m proud that I put our public finances on a sustainable future.” And she went on: “Other people, can make other choices, but they have to explain why they wouldn’t take children out of poverty, why they wouldn’t reduce NHS waiting lists, or why they wouldn’t take money off people’s bills. I’ve made my choices. I am more than happy to defend them.”
