Welfare shake-up is not to save cash, it’s a ‘moral mission’, insists Kendall

Welfare reform is a “moral mission” for the Labour government rather than a way to save money, the work and pensions secretary, Liz Kendall, has said.

With more than 100 Labour MPs threatening to rebel against plans to slash disability benefits for millions of people, Keir Starmer faces the ­possibility of his first defeat when the ­legislation comes before the Commons next month.

Kendall said she thought the government would win a parliamentary vote if it were held tomorrow and insisted the changes were needed to ensure the survival of the welfare state. “I know people are concerned and I am listening hard but my message is that this is about transforming lives,” she said. “I would be reforming the welfare system to be more proactive for those who could work, whatever the state of the public finances.”

In an interview with The Observer, Kendall indicated she was in favour of scrapping the two-child benefit cap, which charities have warned is driving up child poverty. She also made it clear there would be compensation for those who become ineligible to receive the carer’s allowance as a result of the welfare reforms. “We are consulting on how best to support people who may lose,” she said.

With pressure growing on the government to reverse the winter fuel allowance cut, which Labour MPs say often came up on the doorstep during the local election campaign, Kendall insisted that “the policy remains the same”. But she hinted that there could be changes to the threshold at which the payment is removed.

Asked whether it should be raised, she said: ”The principle that millionaire pensioners shouldn’t get the winter fuel allowance is the right one.” Under the cut made by the chancellor, Rachel Reeves, only those who qualify for pension credit and other income-related benefits can receive the payment.

The prime minister is facing his biggest rebellion yet over welfare reform. Dozens of Labour MPs have expressed opposition to government plans to make it harder for disabled people to claim personal independence payments (Pip) and to freeze universal credit incapacity benefits for existing claimants, while cutting them by 50% for new claimants.

The plans are set to save £5bn but critics warn that vulnerable people will be tipped into poverty. The government’s own impact assessment estimates that in 2029-30, 3.2 million families will lose an average of £1,720 a year as a result of the cuts.

Kendall insisted that those who “can never work will be protected”. But she said there would be no rowing back on the changes to disability benefits.

“I know welfare reform is difficult, especially for Labour governments,” she said, “but I’m not going to duck this … When you’ve got 1 ­million young people not in ­education, employment or training, and 2.8 million people out of work due to long-term sickness, I’m not going to write people off and leave them there … No change is not an option.”

Labour had a duty to reform the welfare state to ensure it was sustainable for the long term, Kendall said. “For me, this is a moral mission because I believe that there is a better future for people in so many parts of the country. It is absolutely not cruel.”

Without a change of course, she said, the number on sickness and disability benefits would more than double to 4.3 million over the next decade.

“Some people say wait until you’ve got all the waiting lists down, wait until you’ve created all the new jobs,” Kendall said. “I can’t … We are spending too much on the costs of failure.”