More than 300,000 people face stealth taxes to fund handouts to just 1,000 big families in a single London borough, Kemi Badenoch said yesterday.
The Conservative leader stepped up her attack on Labour’s ‘Benefits Street Budget’ by spelling out the true cost of the controversial decision to scrap the two-child benefit cap.
She said 340,000 taxpayers – a number roughly equal to the entire population of a city the size of Leicester – face having their income tax thresholds frozen for a further three years just to fund the policy in Hackney, where 1,000 families on benefits with five or six children will qualify for an annual windfall of £74 million from the move.
Mrs Badenoch said some of the recipients from lifting the cap would be getting additional payments worth more than £14,000 a year from the taxpayer.
‘No wonder people are angry,’ she said. ‘While those on the minimum wage agonise over whether they can afford another child.
‘People on benefits will get paid an extra £3,500 for every child they have because Labour is lifting the two-child benefit cap.’
The Conservatives have already pledged to restore the two-child cap if they win power.
Lifting the cap will benefit 470,000 bigger families on benefits, who will gain an extra £3,500 per child. But it will cost the taxpayer £3.2 billion a year.
Mrs Badenoch yesterday said the Tories believed the benefits bill could be reduced to pre-pandemic levels – a move that would require slashing £50 billion from the annual cost by the end of the decade. She said existing Tory plans to cut £23 billion from the welfare budget were ‘not enough’.
She announced plans for a ‘full review’ of which conditions qualify a person for welfare support as part of plans to ‘get Britain working again’.
Mrs Badenoch said the current welfare system was not designed to handle ‘the age of diagnosis which we now live in’, which has seen the number of people claiming sickness benefits for mental health disorders soar since the pandemic.
The Tory leader suggested some welfare claimants were ‘gaming’ the system – and hit out at so-called ‘sickfluencers’ offering advice on social media about how to maximise benefit claims.
A new Tory review will now take a fresh look at the benefits system and could eventually lead to hundreds of thousands of people being told they are no longer eligible.
‘All of us will have physical and mental challenges at some point in our lives,’ Mrs Badenoch said. ‘But in an age in which one in four people now self-report as disabled, it’s clear that we are now going to have to draw a line on what health issues the state can support people with.
‘This is a review that we will do carefully over time, with medical and employment experts to make sure we get it right.
‘We want people to get the support they need. But very often, people should be getting support into work rather than cash payments to sit at home.’
Mrs Badenoch revealed that she worked a shift in a café last week – and hit out at those on benefits who believe some jobs are ‘beneath them’.
She warned that the current approach to welfare amounted to ‘economic suicide’, with working people expected to fund an ever higher bill.
‘Right now, in Britain there are more than six million working-age people claiming benefits instead of working. That’s more than the entire population of Norway, who we are paying to sit at home.
‘And where is the money coming from to pay these people to sit at home? How are we funding that? By taxing businesses, taxing jobs, taxing wealth creators.
‘The people in our country who get out of bed and make things happen. This is economic suicide.’
Rachel Reeves defended the latest welfare increases today, telling MPs: ‘I am proud to be the Chancellor whose actions have led to the largest expected reduction in child poverty over a Parliament since records began.’
Mrs Badenoch also fired a warning about recent increases in the minimum wage, saying employers could not be expected to pay more.
The Chancellor announced in the Budget that the minimum wage would rise 4.1 per cent to £12.71 an hour, with the rate for 18-20-year-olds jumping by 8.5 per cent to £10.85 per hour.
Asked whether the rate was now too high, Mrs Badenoch told the BBC: ‘I don’t think that we should be raising it any more for example, we’ve seen that too many businesses can’t pay for it.
‘You can make the minimum wage £1,000 per hour, if businesses can’t pay it none of us are going to have a job.’
