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The chancellor has insisted that “we do need to get a grip” on the welfare budget, saying the “current system is not working for anyone”.

Rachel Reeves said the “bill for welfare is going up by billions of pounds in the next few years”, and argued the system should “get people into work so that more people can fulfil their potential”.

Her comments come ahead of an expected announcement next week of “radical” reforms to the welfare system, with many fearing drastic cuts to support for the most vulnerable.

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Asked by broadcasters on Friday about those fears, the chancellor said: “Well, we’ll set out our plans for welfare reform. But it is absolutely clear that the current system is not working for anyone.

“It is not working for people who need support, it’s not working to get people into work so that more people can fulfil their potential, and it’s not working for the taxpayer when the bill for welfare is going up by billions of pounds in the next few years.

“So we do need to get a grip. We need to spend more on national defence, we need to reform our public services, and we need to reform our broken welfare system.”

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Welfare system ‘letting people down’

Ms Reeves’s comments come after the work and pensions secretary said the current system has locked “millions” out of work and called it “dysfunctional” as the system places a person in binary categories of either “fit for work” or “not fit for work”.

The government has promised to either reform or replace the Work Capability Assessment – which determines if a person is fit for work or not – as they say it currently drives people who want to work “to a life on benefits”.

Ministers have been priming MPs and the public for cuts to a ballooning welfare bill since the start of the year, with details expected next week ahead of an announcement in the chancellor’s spring statement on 26 March.

 Rachel Reeves during a visit Babcock in Rosyth. Pic: PA
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Rachel Reeves during a visit Babcock in Rosyth. Pic: PA

The expected welfare cuts

Ms Reeves is expected to announce several billion pounds of spending cuts after losing her £9.9bn headroom since the October budget, with the welfare budget a key target for cuts.

Fiscal headroom is the amount by which government can increase spending or cut taxes without breaking its own fiscal rules.

The welfare cuts are expected to include £5bn in savings by making it harder to qualify for Personal Independent Payments (PIP), which help people with the additional costs of their disability.

PIP payments next year are also expected to be frozen and the basic rate for Universal Credit paid to those searching for work, or in work, is expected to be increased while the rate for those judged as unfit for work will be cut.

The department for work and pensions said new figures show 1.8 million people are now considered too sick to look for work due to a “broken work capability assessment” so are on Universal Credit but getting no support to find work.

It said the number has almost quadrupled since the start of the pandemic when 360,000 were considered too sick to look for work.

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What welfare cuts could be announced?

Labour MPs criticise benefit cuts

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‘Government’s plan to cut welfare is terrifying’

Labour MPs concerned about cuts

A growing number of Labour MPs are publicly raising concerns and, in an unusual move, all 404 Labour MPs were asked to attend “welfare roundtables” in Downing Street with the Number 10 policy unit on Wednesday and Thursday.

On Wednesday, Sir Keir Starmer faced down Labour MPs unhappy over the rumoured welfare cuts – especially for disabled people.

Richard Burgon pleaded with him to make the “moral” choice, telling the Commons disabled people are “frightened” as he urged the PM to introduce a wealth tax instead of “making the poor and vulnerable pay”.

Sir Keir pledged to “protect those who need protecting”, but later added there is no “bottomless pit”.

He said the Tories “left a broken welfare system, which locks millions out of work, that is indefensible in my view, economically and morally”.

Sir Keir Starmer at PMQ's
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Sir Keir Starmer was asked about the welfare cuts at PMQs

Another Labour MP, John Slinger, urged the PM to reassure the Commons he will “provide compassion to those who can’t work”.

Labour MP Nadia Whittome told the BBC the government should impose a wealth tax instead of “placing that burden on disabled people who have already borne the brunt of 14 years of austerity”.

She added that she “can’t look her mum in the eye and support this”.

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Another tantrum from the Labour backbenches is inevitable

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Rachel Reeves hints at tax rises in autumn budget after welfare bill U-turn

In common with many parents across the country, here’s a conversation that I have with my young daughter on a semi-regular basis (bear with me, this will take on some political relevance eventually).

Me: “So it’s 15 minutes until your bedtime, you can either have a little bit of TV or do a jigsaw, not both.”

Daughter: “Ummmm, I want to watch TV.”

Me: “That’s fine, but it’s bed after that, you can’t do a jigsaw as well.”

Fast-forward 15 minutes.

Me: “Right, TV off now please, bedtime.”

(Pause)

Daughter: “I want to do a jigsaw.”

Now replace me with the government, the TV and jigsaw options with axing welfare cuts and scrapping the two-child cap, and my daughter with rebellious backbenchers.

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Rachel Reeves’s fiscal dilemma

That is the tension currently present between Downing Street and Labour MPs. And my initial ultimatum is the messaging being pumped out from the government this weekend.

In essence: you’ve had your welfare U-turn, so there’s no money left for the two-child cap to go as well.

As an aside – and before my inbox fills with angry emails lambasting me for using such a crude metaphor for policies that fundamentally alter the lives of some of the most vulnerable in society – yes, I hear you, and that’s part of my point.

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Welfare U-turn ‘has come at cost’

For many in Labour, this approach feels like the lives of their constituents are being used in a childish game of horse-trading.

So what can be done?

Well, the government could change the rules.

Altering the fiscal rules is – and will likely remain – an extremely unlikely solution. But as it happens, one of Labour’s proverbial grandparents has just popped round with a different suggestion.

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Welfare: ‘Didn’t get process right’ – PM

A wealth tax, Lord Neil Kinnock says, is the necessary outcome of the economic restrictions the party has placed on itself.

Ever the Labour storyteller, Lord Kinnock believes this would allow the government to craft a more compelling narrative about whose side this administration is on.

That could be valuable, given one of the big gripes from many backbench critics is that they still don’t really understand what this prime minister stands for – and by extension, what all these “difficult decisions” are in aid of.

The downside is whether it will actually raise much money.

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Is Corbyn an existential risk to Labour?

The super-rich may have lots of assets to take a slice from, but they also have expensive lawyers ready to find novel ways to keep their client’s cash away from the prying eyes of the state.

Or, of course, they could just leave – as many are doing already.

In the short term, the future is a bit easier to predict.

If Downing Street is indeed now saying there is no money to scrap the two-child cap (after heavy briefing in the opposite direction just weeks ago), an almighty tantrum from the backbenches is inevitable.

And as every parent knows, the more you give in, the harder it becomes to hold the line.

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UK restores diplomatic ties with Syria

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UK restores diplomatic ties with Syria

The UK has re-established diplomatic ties with Syria, David Lammy has said, as he made the first visit to the country by a British minister for 14 years.

The foreign secretary visited Damascus and met with interim president Ahmed al Sharaa, also the leader of the rebel group Hayat Tahrir al-Sham (HTS), and foreign minister Asaad al Shaibani.

It marks the latest diplomatic move since Bashar al Assad’s regime was toppled by rebel groups led by HTS in December.

In a statement, Mr Lammy said a “stable Syria is in the UK’s interests” and added: “I’ve seen first-hand the remarkable progress Syrians have made in rebuilding their lives and their country.

“After over a decade of conflict, there is renewed hope for the Syrian people.

“The UK is re-establishing diplomatic relations because it is in our interests to support the new government to deliver their commitment to build a stable, more secure and prosperous future for all Syrians.”

Foreign Secretary David Lammy shakes hands with Syrian interim president Ahmed al-Sharaa in Damascus. Pic: X / @DavidLammy
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Foreign Secretary David Lammy with Syria’s interim president Ahmed al Sharaa in Damascus. Pic: X / @DavidLammy

The Foreign, Commonwealth and Development Office has also announced a £94.5m support package for urgent humanitarian aid and to support the country’s long-term recovery, after a number of British sanctions against the country were lifted in April.

While HTS is still classified as a proscribed terror group, Sir Keir Starmer said last year that it could be removed from the list.

The Syrian president’s office also said on Saturday that the president and Mr Lammy discussed co-operation, as well as the latest developments in the Middle East.

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Since Assad fled Syria in December, a transitional government headed by Mr al Sharaa was announced in March and a number of western countries have restored ties.

In May, US President Donald Trump said the United States would lift long-standing sanctions on Syria and normalise relations during a speech at the US-Saudi investment conference.

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From May: Trump says US will end sanctions for Syria

He said he wanted to give the country “a chance at peace” and added: “There is a new government that will hopefully succeed.

“I say good luck, Syria. Show us something special.”

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Secret Service seizes $400M in crypto, cold wallet among world’s largest

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Secret Service seizes 0M in crypto, cold wallet among world’s largest

Secret Service seizes 0M in crypto, cold wallet among world’s largest

Secret Service quietly amasses one of the world’s largest crypto cold wallets with $400 million seized, exposing scams through blockchain sleuthing and VPN missteps.

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