Keir Starmer Delays Welfare System Overhaul

Sir Keir Starmer has halted plans for a reform of Britain’s welfare system. This decision comes as the government aims to avoid confrontations with Labour MPs. The Department of Work and Pensions, or DWP, has been informed that it will not receive parliamentary time to implement any alterations to the benefits system until next year at the earliest. This delay diminishes the likelihood of introducing controversial welfare reforms before the upcoming general election, scheduled for 2029.

Two significant reviews, aimed at reducing the benefits bill, are set to report this year. Both are anticipated to require legislation to enact their recommendations. One review focuses on disability benefits, initiated after government efforts to save £5 billion faced opposition from Labour MPs. This review is expected to present its findings in the autumn. Simultaneously, Alan Milburn, the government’s work tsar, is assessing how modifications to the benefits system could decrease the number of young people outside employment, education, or training.

Plans for a reformulated “unemployment insurance” scheme, which would have offered higher benefits to those recently unemployed while reducing support for long-term claims, have also been shelved. The upcoming King’s Speech, scheduled for May, will outline the government’s legislative agenda for the next parliamentary session, extending until mid-2027. Each government department has sought approval from Downing Street for its proposed legislation.

Government sources acknowledged that while welfare reform may not feature in the King’s Speech, the possibility remains for a bill to emerge later in the session. A minister commented that the closer the next election approaches, the less likely the implementation of difficult reforms becomes. Public sentiment appears to favour welfare reforms, making it essential for the government to demonstrate tangible progress.

The rising costs associated with welfare payments are projected to increase by £35 billion over the next five years, potentially reaching £368 billion. This would result in an average household contributing £12,266 annually to the welfare system, significantly higher than the figures from 2023.

Moreover, Peter Fonagy, a professor of clinical psychology at University College London, has undertaken a review to investigate the surge in diagnoses for conditions such as depression, anxiety, ADHD, and autism. This review is anticipated to conclude in spring. Additionally, Alan Milburn’s forthcoming report is expected to outline solutions for the nearly one million young people currently out of work.

Meanwhile, Stephen Timms, the disability minister, is compiling recommendations on how best to reform personal independence payments. Timms’ review was initiated after a rebellion from backbench Labour MPs that led the government to retract plans for £5 billion in cuts to disability benefits. The recent decision to reduce additional payments for sickness claims will take effect in April this year.

The DWP is adamant that discussions regarding legislation are ongoing. Even if welfare reform does not form part of the King’s Speech, the introduction of a bill remains a possibility, pending the outcomes of ongoing reviews.