With the budget now delivered, Prime Minister Keir Starmer is shifting his gaze to the next major challenge: reforming the welfare state. In a forthcoming speech, Starmer will argue that economic renewal is impossible without addressing the spiraling costs and inefficiencies of the benefits system. He plans to frame this not as an attack on the vulnerable, but as a necessary rescue mission for a system he claims was broken by the previous government.
The Prime Minister points to the fact that the welfare bill increased by £88bn under the Conservatives as evidence of failure. He contends that the current setup often writes off people who are neurodivergent or suffering from mental health issues, leaving them isolated from the workforce. To counter this, Labour is proposing reforms aimed at reintegrating these groups into the economy, viewing employment as a key driver of mental and social well-being.
This push for welfare reform is part of a broader “multiyear economic plan” that also includes significant deregulation. Starmer has instructed ministers to find ways to bypass bureaucratic hurdles for large infrastructure projects. The goal is to stimulate growth from the supply side, making it easier to build and invest in Britain, thereby reducing the reliance on state handouts over the long term.
These proposals are likely to face resistance. Starmer has already experienced pushback from his own MPs when he attempted to cut disability benefits earlier in the year. However, he remains undeterred, enlisting former Health Secretary Alan Milburn to advise on the intersection of health and youth unemployment. The government views these structural changes as the only way to make the numbers add up following the recent tax hikes.
By tying welfare reform to economic survival, Starmer is raising the stakes. He asserts that the status quo is unsustainable and that “propping up” a failing system serves no one. As the dust settles on the budget, the conversation is moving from how money is raised to how it is spent—and specifically, how to reduce the state’s burden by getting Britain back to work.