Kemi Badenoch to offer Tory co-operation on welfare cuts

Kemi Badenoch will urge Sir Keir Starmer to work with the Conservatives on cutting the welfare bill in a speech calling for action to tackle a rising budget deficit.

The Tory leader is to use a speech on Tuesday to offer her party’s co-operation “in the national interest”, while demanding that November’s Budget must not see taxes or borrowing rise.

She will say: “If we’re to cut spending and avoid more punishing tax rises at the Budget, crushing business confidence and pushing up inflation, Keir Starmer has to change his approach.

“And to that end, the shadow chancellor, shadow welfare secretary and I are making him a clear offer: sit down with us.

“Let’s agree a way to bring welfare spending down. And I will offer him the support of the Conservative Party.”

She is expected to add: “This isn’t a blank cheque. It’s an offer to work together in the national interest and to find common ground and a serious plan.”

But a Labour source dismissed her offer as “a gimmick”.

Mrs Badenoch’s speech comes after the appointment of Pat McFadden as Work and Pensions Secretary in last week’s reshuffle.

Mr McFadden will lead a new “super ministry”, incorporating the skills remit previously overseen by the Department for Education and focused on economic growth.

But the appointment of a man regarded as the Prime Minister’s fixer has sparked speculation that Sir Keir could be planning another attempt to reform welfare after he was forced to abandon cuts planned earlier this year in the face of a backbench rebellion.

In a call with Department of Work and Pensions staff on Monday, Mr McFadden focused on the need to ensure young people had the skills they needed to avoid a life on benefits.

Describing this as “an early area of priority for me”, he said the department needed to “ask ourselves some tough questions” about the rising number of young people not in education, employment or training.

He said: “I know that a lot of you are engaged in helping people onto skills courses and helping people onto training courses, but I’m hoping that with the change in the department’s responsibilities, we can really emphasise that more and give ourselves the ability to bring these things together in a new and good way.”

In her speech on Tuesday, Mrs Badenoch is also expected to recommit her party to keeping the two-child benefit cap, which Labour faces backbench and public pressure to scrap and Reform UK has already promised to abolish.

She will also accuse the Chancellor, Rachel Reeves, of creating a “tax doom loop” that will see the deficit double over the next five years while increasing taxes and “pushing Britain closer to a bond crisis”.

Last week, long-term government borrowing costs reached highs not seen since 1998 amid concern about ministers’ ability to keep the public finances under control and a global bond sell-off.

But yields on 30-year government bonds, known as “gilts”, have since fallen back to last month’s levels.