Labour unveils plan to reduce benefits bill as Starmer declares system ‘simply isn’t working’

Labour will today announce plans to bring more people back into work and reduce the country’s benefits bill, with Keir Starmer admitting Britain “simply isn’t working”.

The government will replace the network of Jobcentres with a new National Jobs and Careers Service, while more NHS staff will be sent to areas with higher rates of joblessness.

Additional employment and training opportunities will be given for young people and extra powers provided to mayors to develop their own employment plans.

The reforms, to be unveiled by work and pensions sectretary Liz Kendall today, will also see an expansion of mental health support and efforts to tackle obesity.

The ‘Get Britain Working Again’ white paper is part of a government pledge to bring more than two million people back into work.

While unemployment stands at almost 1.5 million, economic inactivity has also soared to more than nine million, with 2.8 million people out of work due to long-term sickness – a major driver of the rise in joblessness since the pandemic.

Sir Keir said: “From the broken NHS, flatlining economy, and the millions of people left unemployed and trapped in an inactivity spiral – this government inherited a country that simply isn’t working. But today we’ve set out a plan to fix this.

“Our reforms put an end to the culture of blaming and shaming people who for too long haven’t been getting the support they need to get back to work.”

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Tackling economic inactivity, which has risen by 600,000 people since the pandemic, is seen as vital to both boosting economic growth and reducing a spiralling welfare bill that threatens to demand more resources from the Treasury.

The new system replacing Jobcentres is expected to have a greater focus on helping people back into work rather than monitoring benefit claims, Labour has said.

Although further detail on Ms Kendall’s plan to also bring in benefit sanctions for those who don’t engage with the Department of Work and Pensions has not yet been provided.

Labour ministers have come under fire recently for the move.

Writing on Twitter/X, veteran Labour MP Diane Abbott accused the prime minister of “peddling the benefit scrounger mythology” as he vowed in the Mail on Sunday to tackle the “bulging benefits bill blighting our society.”

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Speaking on LBC, Policy in Practice director Deven Ghelani said the language “is a continuation of Conservative policies.”

“There are certain messages that politicians believe the public need to get elected, to show they’re being tough, which blinds us from what some of the real challenges are. And I think this is another example of this happening,” he said.

However, the think tank boss also said that Labour’s tone shows the party is “much more aware” of the challenges that people on disability face.

He adds that the number of people unable to work due to long-term sickness – a record 2.8 million in February – demonstrate the “consequences of a really sharp programme of austerity” under previous Conservative administrations.

Addressing this, Labour’s wide-ranging white paper has also reaffirmed Labour’s commitment to “fix the NHS,” outlining the need to prevent ill health that leads to economic inactivity. The party has pledged £22.6 billion in 2025/26 to improve the NHS and deliver 40,000 more appointments.

The government has remained coy on planned overhaul to health and disability benefits but promises that a consultation will be published in Spring. Acknowledging campaigner calls, ministers say the views of disabled people will be at the heart of this.

However, the party still maintains a commitment to Conservative spending plans to shave £3bn from the welfare bill over the next four years. This has led to fears from welfare rights campaigners that much-maligned reforms to disability benefit health assessments may still be on the cards.