Prime Minister Keir Starmer is set to defend his government's recent Budget decisions in a major speech, arguing they are essential to create a fairer economy and reform the welfare system amidst growing political pressure.
Starmer will outline how the Budget choices are designed to boost economic growth and bring down the cost of living, directly countering claims from opposition figures that the financial plan will leave British households worse off.
Driving Growth and Investment
Central to the government's economic plan is a major industrial strategy, with £250 billion secured to drive investment into key sectors such as defence, life sciences, and clean energy.
As part of this growth initiative, Starmer will instruct Business Secretary Peter Kyle to provide monthly updates on the strategy's implementation, ensuring its momentum is maintained.
In his speech, the Prime Minister is expected to state, "Rooting out excessive costs in every corner of the economy is an essential step to lower the cost of living for good, as well as promoting more dynamic markets for business."
Welfare System Overhaul
The Budget has also ignited debate over welfare, particularly the government's decision to abolish the two-child benefit cap. This move has been fiercely criticised by the Conservatives, with leader Kemi Badenoch labelling it as "immoral" and a burden on younger generations, vowing to reverse it if her party returns to power.
According to the Office for Budget Responsibility, lifting the cap will cost £2.3 billion in the 2027 financial year, rising to £3 billion by 2030.
However, Starmer and Chancellor Rachel Reeves maintain that the system they inherited left too many children in poverty and a high number of young people out of work due to sickness.
Following the removal of the cap, the government will now focus on what it describes as a welfare system that traps people in poverty and unemployment. The new approach will involve investing in apprenticeships and guaranteeing training or work for young people.
"We must also reform the welfare state itself," Starmer will say. "This is about potential... if you are ignored that early in your career... it can trap you in a cycle of worklessness and dependency for decades. We need to remove the incentives which hold back the potential of our young people."
Addressing the "Stealth Tax" Controversy
The government faces significant scrutiny over a key Budget measure: the freezing of income tax thresholds until 2031. Critics, including some economists, argue this constitutes an £8.3 billion "stealth tax" that breaks a manifesto promise and is projected to drag 920,000 more Britons into paying income tax.
Despite the controversy, the Prime Minister will insist that the overall Budget decisions are necessary to reduce energy bills, lower inflation, and fund vital public services, ultimately building a foundation for future prosperity.
