Work and Pensions Secretary Liz Kendall is fighting to be allowed to use the money to fund schemes to reduce the UK’s long-term sickness epidemic and get those people back into work
A Labour Party row has erupted over benefit cuts as Rachel Reeves “plots to reduce spending by £5billion” – but resists calls to spend it on defence or back-to-work schemes. Work and Pensions Secretary Liz Kendall is fighting to be allowed to use the money to fund schemes to reduce the UK’s long-term sickness epidemic and get those people back into work, the Times reported.
Any attempt to cut benefits are also likely to go down very badly among Labour backbenchers who are already being asked to support the two-child benefit cap. Last month it was revealed that higher spending on Universal Credit and disability benefits has contributed to an expected £8.6 billion breach of the welfare cap.
Ms Kendall confirmed the forecast overspend in a written statement to MPs, adding ‘no action’ was taken by the previous Tory administration to prevent it. Labour Party MP Ms Kendall said: “The forecast breach, due in particular to expected higher expenditure on Universal Credit and disability benefits, is unavoidable given the inheritance from the last government.
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“The likely scale of the eventual breach has been known since March 2023. No action was taken by the previous administration to avoid it. 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.”
Ms Kendall said previously: “The UK is the only G7 country whose employment rate has not returned to pre-pandemic levels. 2.8 million people are locked out of the workforce due to poor health. Millions are stuck in low paid, insecure work. 420,000 more households are predicted to claim Universal Credit health benefits by the end of the decade, increasing from a third to a half of all Universal Credit claims. Nearly 1 in 8 of all our young people are not in education, employment or training. All of this has contributed to a higher welfare bill and the breach of the welfare cap.
“It is not just the economic cost of this failure that is unacceptable, but also the human cost to individuals and communities denied the opportunity to improve their living standards through work.
“That is why, with our ambition to achieve an 80% employment rate, we are delivering radical reforms to drive up employment and living standards, getting a grip of the benefits bill, and making the system fairer.”