SIR Keir Starmer has been forced into a panicked pledge to try to slash welfare after his “Benefits Street Budget” triggered a fierce backlash and left Rachel Reeves battling for her job.
The PM will today try to steady his government after the Chancellor denied lying to the public, insisting that she needed to raise taxes to a record level to ensure economic stability.
Sir Keir will use a major speech to argue the welfare system is “trapping young people out of work” and push for stripping out the “incentives” he says hold them back.
But the tough rhetoric comes only after a furious backlash over Labour’s second Budget, which hiked taxes on workers while funnelling billions more into welfare – and left Ms Reeves battling allegations she misled the public.
Almost one million extra people will be dragged into the higher income tax band after Labour chose to keep thresholds meaning a quarter of the entire workforce will pay 40 per cent tax by the end of the decade.
At the same time, the Chancellor drove welfare costs sharply up by scrapping the two-child cap.The storm intensified on Friday when it emerged line now central to accusations she misled the public.
In a bruising round of Sunday interviews, the Chancellor insisted she “of course” did not lie.
She told broadcasters: “Anyone who thinks that there was no repair job to be done on the public finances, I just don’t accept that.”
But The Times revealed senior ministers are also accusing the Chancellor and the PM of misleading Cabinet over a hole in the public finances.
A Cabinet minister said: “At no point were we told about the reality of the OBR forecasts.
- Had we been told, we might have been in a position to advise against setting hares running on