Labour will repeat Blair’s mistakes on ‘spiralling’ benefits spending, says Mel Stride

Labour would repeat the mistakes of the Tony Blair era and send the benefits bill “spiralling out of control”, Mel Stride has warned.

The Work and Pensions Secretary said that Sir Keir Starmer’s plans will lead to “hundreds of thousands” more people languishing on handouts.

In an interview with The Telegraph, he added the Labour leader would have to put up taxes to cover the rising cost of welfare payments.

Britain’s welfare bill stood at £32 billion when New Labour came to power in 1997 but had doubled to £63bn by the time it left office in 2010.

Post-pandemic spike

It is projected to hit £100bn a year from 2028 following a post-pandemic spike in long-term illness fuelled by a rise in mental health problems.

Labour will inherit record levels of long-term sickness if it wins the election with 2.8 million Britons signed off - an increase of 700,000 since Covid.

The Tories have unveiled plans for a clamp down on sick notes that would see 424,000 of those people moved closer to a return to work.

But it is unclear whether Sir Keir, who has previously described benefits sanctions as “punitive”, would reverse the reforms once in power.

‘Watering it down’

“If they start unpicking that or watering it down you’re just going to see [the number of] people on these benefits just ballooning,” Mr Stride said.

“Hundreds and hundreds of thousands more people on those long-term benefits. We’ve seen it all before - it’s what they did last time.”

The unemployment rate rose sharply under New Labour, going up from 5.3pc to 7.9pc. It has dropped down to 4.4pc under the Tories.

Youth unemployment spiked by almost 45pc over its time in power.

‘Absolutely abysmal’

“They talk a good story about how they’re going to stand up for young people but you look at their record and it’s absolutely abysmal,” Mr Stride said.

“If you look at welfare you’ve got the spending point but you’ve also got the number of people that were stuck on long-term benefits.

“It was over a million people were stuck on those for almost a decade. This is where it’s going to become really unstuck.”

Sir Keir has said he wants to “build on the legacy” of Blair era policies which saw overall levels of both child and pensioner poverty fall.

Those results were “largely driven by very significant additional spending on benefits” according to think tank the Institute for Fiscal Studies.

Mr Stride warned that Labour has not “shown any signs of any determination to get on top of a rapidly increasing welfare bill” if it wins power.

“The taxpayer will have to foot any bill here and the fact Labour will let it spiral out of control is another reason why they are going to be putting taxes up,” he said.

“The bottom line is all of this will feed into higher taxes if they’re just not going to grip the welfare bill. They have no plans to save a single penny on welfare.”

Tory analysis has claimed that the cost of the welfare bill would balloon by at least £420 million a year if Labour were to scrap benefits sanctions.

It would mean that more than 130,000 claimants would no longer be required to look for work every month or face having their handouts cut.

Labour has said it will not scrap sanctions entirely, though it plans to take an approach centred more around encouraging people back into work.

The main plank of the party’s plan to get more Britons off sickness payments and back into employment centres on bearing down on NHS waiting lists.

‘Modest difference’

But the Office for Budget Responsibility has cast doubt on the effectiveness of its proposals, suggesting they would only make a “modest difference”.

Liz Kendall, the shadow work and pension secretary, insisted in March that there will be “no option of a life on benefits” under a Labour government.

The party’s manifesto states that “people who can work, should work and there will be consequences for those who do not fulfil their obligations”.