Sir Keir Starmer has insisted welfare reform is still on the table as he took the blame for Tuesday’s U-turn in the face of a major backbench rebellion.
In an interview with the BBC, the Prime Minister acknowledged his Government did not “get the process right” and failed to “engage in the way that we should have done” on welfare changes.
But he added his Government would “come through it stronger” as he vowed to “reflect” on what needed to be done “to ensure we don’t get into a situation like that again”.
Despite the setback, which saw changes to the personal independence payment (Pip) stripped out of his welfare legislation, Sir Keir said on Thursday his Government was “pressing on with welfare reform”.
Answering questions at the launch of Labour’s NHS plan, he said: “It is important we reform the system. Welfare isn’t working.”
The Prime Minister went on to praise disabilities minister Sir Stephen Timms, who is now leading a review of Pip, saying he was “a thoroughly decent man of huge integrity that we can have faith in to do the review and make the changes that are necessary”.
Sir Keir’s U-turn saw planned changes to Pip eligibility put off until after Sir Stephen has completed his review of the benefit next autumn, leaving only changes to universal credit to go forward.
That decision has caused a fiscal headache for Chancellor Rachel Reeves, with the £4.8 billion of savings the reforms were expected to deliver now unlikely to materialise.
Economists have warned that this is likely to mean further tax rises in the autumn, and the Prime Minister did not rule out the possibility on Thursday.
Ms Reeves has previously promised she would not need to repeat the £40 billion tax raid she set out in October 2024.
Asked if he would repeat that commitment, Sir Keir said: “No prime minister or chancellor is going to write a budget in advance, but we did really tough stuff in that budget last year.”
But he added that last year’s budget had already done much of the “heavy lifting” on repairing the public finances.
The Chancellor also declined to “speculate” about tax rises ahead of the budget, but told broadcasters there was “a cost to the welfare changes that Parliament voted through this week and that will be reflected in the budget”.
Ms Reeves herself appeared alongside Sir Keir and Health Secretary Wes Streeting at the launch of the NHS plan on Thursday, a day after she had appeared visibly tearful in the Commons during Prime Minister’s Questions.
The Chancellor told broadcasters it had been related to a “personal issue”, while Sir Keir gave her his full backing, adding: “I think it’s just fantastic she’s here and, as I say, none of this would be happening if she hadn’t taken the decisions that she’s taken.”
Questions about the Chancellor’s future had sparked a sharp fall in the value of UK government bonds on Wednesday, but the markets rallied on Thursday morning following repeated reassurances she was safe in Number 11.
But Conservative shadow chancellor Sir Mel Stride said the scenes in the Commons over the past week had left bond markets “twitchy” about the Government and “their ability to actually grip things like spending going forward”.
