One of Sir Keir Starmer’s top allies has paved the way for another fight with MPs over benefits cuts, calling for “further reform” to Britain’s welfare bill.
In a move that risks a repeat of last year’s chaotic U-turn, which sparked questions over the prime minister’s authority, education secretary Bridget Phillipson said there “needs to be further reform to the social security system for people to get back into work”.
Last year, Sir Keir attempted to impose welfare reforms that would have saved around £5bn per year, but he was forced to U-turn on the majority of the cuts at the last minute following a furious revolt by Labour backbenchers.
The government was facing a humiliating defeat, with more than 120 Labour MPs having signed a rebel amendment seeking to kill the welfare bill.
There is now a growing expectation that the government will attempt fresh reforms in the autumn to slash the ballooning welfare bill.
Speaking to The Independent after the government lifted the two-child benefit cap this week, Ms Phillipson insisted that the move – which is expected to lift 450,000 children out of poverty – “shows the Labour government is on the side of working people”, but she also failed to rule out further welfare reforms at the next Budget.
Asked whether she could rule out imposing more benefits cuts, the education secretary said: “All changes that we consider at a Budget will be taken and considered by the chancellor at that time.
“And of course, we do believe that there needs to be further reform to the social security system for people to get back into work.”
She added: “That’s why the change that we’re bringing in from this week around universal credit means that people won’t feel that they have to be declaring themselves unfit for work or sick in order to get the support that they need.
“And the changes to the standard allowance of universal credit are around incentivising work, running alongside the youth guarantee that is supporting businesses to employ young people who have been out of work for extended periods of time.”
Responding to suggestions the government could come back for another round of welfare cuts in the autumn, Labour MP Kim Johnson – who rebelled over the last set of reforms – told The Independent: “If they implement austerity [version 2] it will be disastrous for most vulnerable members of society.”
She added: “Instead, they need to think about taxing the super rich. We are a rich country, yet far too many are not paying their way.”
Defending the decision to drop the two-child limit when it is widely expected that further benefit cuts will come down the line at the next budget, Ms Phillipson said lifting children out of poverty is not only an investment in their futures, “but it’s also an investment in our country”.
She continued: “It is right that we lift the two-child limit. It’s a grave moral injustice that so many children over such a long period of time have had their life chances damaged by the two-child limit,” she said.
“This is an investment in our children, in their futures, but it’s also an investment in our country, because we know that we’re held back when we have so many children growing up in poverty and it doesn’t just damage their life chances, it damages our economy.
“It damages our prosperity as a nation. It’s the right choice to make.”
She described the two-child benefit cap – introduced by the previous Conservative government – as a “moral scandal” and “an outrage”.
“We know that the majority of children growing up in poverty in our country are in working households, and they’ve taken the brunt of years of hardship… It’s a moral scandal. It’s an outrage that hundreds of thousands of children have had their life chances blighted by avoidable poverty,” she added.
Ms Phillipson also accused the Reform party of being “determined to push hundreds of thousands of children back into poverty” with its promise to reinstate the cap.
“I think that tells you everything about their priorities,” she said. “Whereas we as a Labour government are backing working families.”
Ms Phillipson continued: “We know that people are worried about the cost of living at the moment, and this is going to make a really big difference to families. It is still a difficult time, but crucially, it will also provide much needed support for children so that they can go on to achieve all that they’re capable of.”
The lifting of the cap comes just a month before the country will go to the polls at the local elections, where Labour is expected to suffer a bruising defeat at the hands of Nigel Farage’s Reform.
Asked about claims from critics that Labour have been too slow to implement the change they promised at the last general election, the education secretary said: “I do understand the frustrations that people feel. They had years and years of their community suffering through the impact of successive Tory governments and the damage that austerity caused.
“And it does take time to undo all of that and to deliver the positive change that people want to see.”
She added: “I am proud of all of the action we’ve taken so far, whether that’s lifting the two-child limit and expanding free school meals, a huge expansion in childcare and early years support for families.
“And that runs hand in hand with all of the other measures that we’re taking around improving the NHS, cutting waiting lists, making sure that people can see a GP if they need to.
“All of that is happening because of the Labour government and so many of the changes that we’re delivering are opposed by Reform and opposed by the Conservatives who’d set our country back.”