Prime Minister Sir Keir Starmer has voiced concerns over how the government’s proposed changes to the benefits system have been assessed by the independent fiscal watchdog, the Office for Budget Responsibility (OBR).
Speaking at a parliamentary committee session, Sir Keir said the OBR assumed that “not a single person” would alter their behaviour in response to the government’s reforms. “I personally struggle with that way of looking at it, because I do think these measures will make a material difference,” he said.
The government’s welfare plans aim to tighten access to disability benefits, with the goal of reducing spending and encouraging more people into work. However, the proposals have sparked anxiety among some Labour MPs, particularly due to concerns over their potential social impact.
During the session with Parliament’s Liaison Committee which comprises senior MPs Sir Keir was questioned by Debbie Abrahams, chair of the work and pensions committee. Abrahams pointed to a government impact assessment suggesting the changes could push 250,000 people into poverty, while estimates from the Joseph Rowntree Foundation put the figure closer to 400,000.
She stressed that children growing up in poverty often face long-term barriers to employment and challenged the prime minister to explain how his approach would tackle the root causes of poverty rather than deepen it.
Responding, Starmer reiterated his concern that the OBR’s evaluation did not account for potential behavioural changes. “The OBR has scored nothing against any change here the assumption is that not a single person changes their behaviour,” he said.
Last month, the OBR published its review of the government’s spending plans. While it acknowledged the potential for increased employment from additional support for people with health conditions, it noted that there was insufficient policy detail to fully assess its impact. It also said it had not been given enough time to evaluate the labour market effects of proposed changes to eligibility for health and disability benefits, but pledged to provide a full analysis in a future forecast.
Among the changes proposed are stricter eligibility criteria for personal independence payments and a freeze on incapacity benefits under universal credit.
During the same committee hearing, the prime minister also addressed other key issues:
- He expressed disappointment over U.S. tariffs but urged caution, saying the UK should not “jump in with both feet” in retaliation.
- He confirmed that “all options remain on the table” regarding the future of the Scunthorpe steel plant.
- He announced that a review into social care is expected to produce an interim report by 2026.
Following the session, Conservative leader Kemi Badenoch criticised the prime minister, saying: “Labour literally passed a law in October requiring the government to listen to the OBR… now they’re criticising it. Another [Rachel] Reeves gimmick that shows they don’t know what they are doing.”
The government legislation introduced in July ensures that future administrations cannot bypass the OBR, requiring the independent body to assess all permanent tax or spending plans that amount to more than 1% of the UK’s economic output.
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