Prime Minister Rishi Sunak said tax cuts paid for by trimming the benefits budget through reforms would be about creating “fairness”.
The Conservative Party leader said Britain’s welfare system “is not working”, stating that the number of people signed off from work due to sickness has tripled in the past 10 years.
He signalled that the UK Government would bring about reforms that meant “everybody who can work does work”.
It comes after he told The Sunday Telegraph he wanted to “keep cutting taxes” but that to do so it “requires difficult decisions to control welfare”.
It raises the prospect that the Conservative Party leader could look to find headroom to offer tax cuts ahead of an election by reducing public spending or reforming how welfare support is funded.
Labour leader Sir Keir Starmer accused the Prime Minister of seeking to create “dividing lines” with his comments ahead of voters going to the polls later this year to elect a new Westminster government.
Baroness Casey, the UK’s former victims’ commissioner, said “a lot of people in Britain will not feel these tax cuts” and suggested the Prime Minister was “selling nonsense”.
“If they were going to crack down on welfare, why haven’t they done it by now? And as far as I can see, it isn’t working,” she told the BBC’s Sunday With Laura Kuenssberg programme.
We've made tough decisions on the economy while supporting people through global shocks like the pandemic.
Because of those tough decisions, we're able to now cut taxes.
Today's tax cut will put £450 back in the pocket of the average worker and help them make ends meet. pic.twitter.com/N0j3O3hVjP
— Rishi Sunak (@RishiSunak) January 6, 2024
“And the idea that all of these people are benefit scroungers when most of them are working — the vast majority of people on benefits are working.”
Mr Sunak, during an interview with Ms Kuenssberg, said it was not only the welfare budget he was looking to control but public spending “across the board”.
“It is about discipline on public welfare. It is about discipline on public sector pay,” he said.
The Prime Minister said he was concerned about the “very significant rise in the number of people who have been deemed unfit to work” in recent years.
“In the last decade, that system hasn’t been reformed at all and you have seen the number of people who are signed-off has tripled,” Mr Sunak said.
“Now do I think our country is three times sicker than it was a decade ago? The answer is no.
“The system is not working as it was designed to work and now we are bringing forward reforms that will mean that we look at the eligibility for who is signed-off sick.
“That won’t affect all those on existing benefits. It will come in over time on people who are newly presenting to the welfare system.”
The Prime Minister argued the reforms to benefits were “about fairness” and “about making sure that everybody who can work does work”.
“And for everyone who is working hard, we reward that hard work with tax cuts, that is a conservative approach, it is one that I think is right for our country,” he added.
The remarks come after Saturday saw the introduction of a 2p cut in national insurance, a tax cut first announced at the autumn statement in November.
The main rate of national insurance has been reduced by two percentage points, from 12% to 10%.
Chancellor Jeremy Hunt said the pre-election cut means families with two earners are nearly £1,000 better off a year.
But Labour said it amounted to a “raw deal” as Mr Hunt has kept tax thresholds frozen, a fiscal policy first introduced by Mr Sunak when he was chancellor during the coronavirus pandemic.
The frozen thresholds will provide a de facto tax rise to millions as their wages increase with inflation while tax bands remain static.
Sir Keir said talk of pre-election giveaways by the Prime Minister were being made “in his own self interest” and was the “wrong way to govern”.
The Opposition leader told Sky News on Sunday: “He has run out of ideas.
“They are desperately thrashing around and trying to find the dividing lines to go into the election.
“It is not part of a strategy for growing the economy, it is simply picking tax cuts that the Prime Minister thinks might create a dividing line going into the election.
“That is the wrong way to govern.
“Whichever party you are in, it doesn’t matter whether you are Conservative or whether you are Labour, to simply go down the road of desperately picking anything that creates a divide rather than having a strategy for the country is characteristic of what has gone wrong over the last 14 years.”
Liz Kendall, the shadow work and pensions secretary, said Mr Sunak’s “damning assessment of the welfare system” was the “shameful consequence” of almost 14 years of Conservative rule.
“Under the Tories, the benefits bill has spiralled, the number of people locked out of work due to long-term sickness is at a record high, and their so-called plan to ‘get Britain working’ is no such thing,” she said.
Ms Kendall said Labour had a plan that would seek to “tackle the root causes of economic inactivity” in a bid to “get the benefits bill down and get Britain working”.
Labour has looked to push back against any suggestion that taxes could rise under a Sir Keir premiership.
The party leader said in September that he would not raise income tax if he secures the keys to 10 Downing Street and shadow chancellor Rachel Reeves this week appeared to reject the idea of increasing national insurance.
Sir Keir, who said the tax burden on working people is too high, refused to say what taxes he would like to see reduced, instead emphasising the need to grow the economy.