Britain’s benefits system is the “worst of all worlds”, with the number of people out of work or training “indefensible and unfair”, the prime minister has said as he prepares for deep cuts to disability payments.
Addressing a private meeting of Labour MPs on Monday evening, Keir Starmer said he would take tough decisions to cut the bill for working age health and disability benefits, which is expected to hit £70bn by 2030.
The government has already vowed to cut £3bn over the next three years and is expected to announce billions more in savings from the personal independence payment (Pip), the main disability benefit.
The Department for Work and Pensions (DWP) is preparing to publish a green paper on sickness and disability benefit reform in the next few days ahead of the chancellor’s spring statement at the end of the month.
The prime minister’s intervention comes amid deep disquiet in the parliamentary party about the scale of the changes likely to be faced by some of the most vulnerable.
Addressing a meeting of the parliamentary Labour party in Westminster, Starmer said the current system was “discouraging people from working”.
The numbers of young people out of work meant “a wasted generation”, he said, with one in eight young people not in education, employment or training. “The people who really need that safety net [are] still not always getting the dignity they deserve.
“That’s unsustainable, it’s indefensible and it is unfair, people feel that in their bones,” he said. “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.”
Starmer said the government would promise to “make work pay” for those who could work and that a safety net would be there if people needed help.
But echoing the words of the justice secretary, Shabana Mahmood, last week, Starmer said: “This is the Labour party. We believe in the dignity of work and we believe in the dignity of every worker, which is why I am not afraid to take the big decisions needed to return this country to their interests whether that’s on welfare, immigration, our public services or our public finances.”
After the meeting, MPs privately criticised the prime minister for failing to respond to a direct question on Pip when one directly challenged him. The MP described his own daughter who has significant disabilities, and asked for reassurance about the cuts, saying they would have a huge impact on his own family. “There was audible support in the room but the PM did not respond,” another MP said.
Another MP said there was otherwise little specific dissent in the room. “People wanted to know how to make the argument … And he talked about how many young people are on these benefits and how that cannot be right.”
Starmer’s intervention came as a group of leading disability and poverty charities urged ministers to think again about the planned cuts, saying they would have a devastating impact on the some of the UK’s poorest families.
The group’s letter to Rachel Reeves said that while the charities agreed with the government that the benefits system was broken and needed reform, they believed the human cost of cuts in the value of benefits would be too great.
The letter said: “Making cuts to disability benefits would have a catastrophic impact on disabled people up and down the country. Scope’s analysis of government figures shows that without Pip, a further 700,000 more disabled households could be pushed into poverty.
“Life costs more for disabled people. Huge numbers already live in poverty as a result of these extra costs. The impact of any cuts to disability benefits would be devastating.
“We agree with the government’s ambition to support more disabled people into work. However, making cuts to disability benefits will not achieve this goal or fix the system. In fact, there is little evidence to suggest cutting benefits increases employment outcomes.”
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The signatories include the chief executives of Scope, the Joseph Rowntree Foundation (JRF), Citizens Advice, Mencap, RNIB, Mind, the Trussell Trust, Sense, National Autistic Society and Parkinson’s UK.
The government has argued reform is needed because the design of incapacity benefits effectively means ill and disabled claimants – many of whom say they want to work – are incentivised not to consider work and are cut off from meaningful job support.
Incapacity benefits – sometimes known as sickness benefits – are means-tested payments mainly attached to universal credit. Claimants assessed as having “limited capability for work-related activity” receive about £5,000 a year on top of the standard universal credit award, and are exempted from having to find work.
Disability benefits are not means-tested and not linked to employment status. They are meant to help the recipient with the extra daily costs of disability. Pip is worth between about £1,500 and £9,600 a year, depending on the assessed level of disability.
The government is concerned that the recent growth in the bill for these benefits, which rose by nearly £13bn to £48bn between 2019-20 and 2023-24, is unsustainable.
The rise has been at the centre of culture war rows, with rightwing politicians and media claiming the benefits are too easily claimed by young people with mild mental illness.
Critics say there is little evidence that the UK is spending proportionately more of GDP on working age incapacity and disability benefits than it was 20 years ago. There is no evidence the benefits are easier to claim, or that the rise is out of sync with health data showing more people are ill and disabled.
Charities say cuts or tightened benefit eligibility restrictions will undermine the government’s stated ambition to cut child poverty. JRF estimates that 900,000 children live in a household where someone receives sickness benefits though universal credit.
Starmer also told MPs on Monday that the time had come to step up defence spending, hours after he spoke to the US president, Donald Trump, as leaders prepared to meet in Saudi Arabia to discuss a Ukraine ceasefire deal.
He said the international turmoil could be a moment of opportunity to reshape the economy. “The real world is moving quickly and people look to their government not to be buffeted about by that change – not even to merely respond to it – but to seize it and shape it for the benefit of the British people,” Starmer said.
“Our defence and the security of the British people must come first. The extra defence spending I announced last week will rebuild industry across the country. It will support businesses, it will provide good, secure jobs and skills for the next generation. That is what we owe the British people.”
