Ministers ‘pushed ahead too fast' on welfare reform, says Phillipson
Ms Phillipson told the BBC's Sunday With Laura Kuenssberg programme that she was 'not going to pretend that it hasn't been a tough or a challenging week' after ministers were forced to scrap their plans for the personal independence payment (Pip) in the face of a backbench revolt.
Education Secretary Bridget Phillipson appearing on the BBC 1 current affairs programme Sunday With Laura Kuenssberg (Jeff Overs/BBC/PA)
'I'd be the first to acknowledge that, both in the pace and the nature of what we set out, we didn't get it right, but we do need to reform the system we've got,' she said.
Asked about the Prime Minister's authority, the Education Secretary said: 'What the Prime Minister has said, and what I also believe, is that what we set out, we pushed ahead too fast, we didn't listen enough to people, including, I would say, including to lots of people who had concerns about the nature of that change.'
Ministers have warned MPs that there will be financial consequences to the decision not to reform Pip as planned.
Labour backbenchers have also been pushing for the Government to scrap the two-child benefit cap.
When asked if there was now less chance of the cap being scrapped given the costs that come with Tuesday's decision, Ms Phillipson told the BBC that ministers were 'looking at every lever and we'll continue to look at every lever to lift children out of poverty'.
Pushed on whether the likelihood of the cap going was now slimmer, Ms Phillipson said: 'The decisions that have been taken in the last week do make decisions, future decisions harder.
'But all of that said, we will look at this collectively in terms of all of the ways that we can lift children out of poverty.'
Meanwhile, shadow chancellor Sir Mel Stride had written to the budget watchdog asking whether a new updated fiscal forecast was in the works after Labour's U-turns on welfare and winter fuel.
I've written to the @OBR_UK seeking urgent clarity on the multi-billion pound hole created by Labour's unfunded spending commitments. When governments lose control of the finances and transparency is sidelined, confidence in our economy is put at risk.
Parliament and the public… pic.twitter.com/2jEzjC4vGa
— Mel Stride (@MelJStride) July 6, 2025
In his letter to the Office for Budget Responsibility, Sir Mel said: 'The public, Parliament and markets deserve clarity and transparency about the impact of recent events on the nation's finances and the Government's fiscal strategy.'
The Conservatives will try to change the Government's welfare Bill to tighten up access to Pip and universal credit by laying a series of amendments this week.
Tory leader Kemi Badenoch will also pledge that the Tories are 'now the only party committed to serious welfare reform' in a speech expected on Thursday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
42 minutes ago
- Telegraph
Thames Water faces rocketing demand for supplies
Thames Water has warned that plans to build 100 new data centres across London and the South East will pile more pressure on its creaking infrastructure. The utility giant said it had identified 108 'hyper or large' data centres that will drive up demand in its region, with bosses suggesting it will have to manage water supplies carefully to ensure there is no impact on households. Each data centre is equivalent to thousands of homes being added to a water network, meaning the pipeline of new data centres is on par with a new small city being built. In its annual report, Thames Water said that building data centres 'needs to be carefully managed from a demand and UK growth perspective'. The company, which is battling to avoid nationalisation amid pressure from a £17bn debt pile, has previously raised the prospect of rationing water use for data centres or charging more at peak times. Data centres contain giant racks of computer servers that need to be cooled to avoid overheating, often with water piped in. The facilities are crucial to the rise of artificial intelligence and are a key priority for Sir Keir Starmer's growth push. However, the vast number being built has sparked concern among water companies such as Thames Water, which is now engaging with the Government to prevent potential shortages in future. 'The south-east of England is a water-stressed region and data centres can use a vast amount of water, equivalent to the usage of thousands of homes at peak draw,' a Thames Water spokesman said. 'With a large proportion of the proposed data centres earmarked to be built in the Thames Water region, it brings a challenge between safeguarding our finite resources while supporting the UK's growth strategy. 'It is important that we work collaboratively to meet this challenge and to avoid exacerbating water stress and impacting service for customers and the environment.' 'We are engaging with the Government regarding the challenge of water demand related to cooling data centres and how this can be mitigated. We are also working with a number of data centre providers about opportunities to reduce demand through innovation.' A corridor of land between London and Slough, much of which is served by Thames Water, contains Britain's densest collection of data centres. An independent review of the water sector last week cited data centres as one of the factors that are likely to mean water bills rising by 30pc over the next five years. The report, by Sir Jon Cunliffe, a former deputy governor of the Bank of England, said that national infrastructure bodies should be consulted when deciding where to build them. The Government has welcomed investment in new data centres, including designating them as critical national infrastructure. Thames Water last week started a hosepipe ban for more than 1 million people in Gloucestershire, Oxfordshire, Berkshire and Wiltshire. The company is also seeking to agree a rescue deal with creditors, but has warned it may fall into special administration if talks between the lenders and regulator Ofwat fail.
BBC News
42 minutes ago
- BBC News
Former North Tyneside Mayor Dame Norma Redfearn granted Freedom of Borough
The former three-time mayor of North Tyneside has been granted the council's highest Norma Redfearn was nominated for the Freedom of the Borough in recognition of her "extraordinary leadership" and the "transformative change" brought to the area during her Karen Clark put forward the Labour veteran's nomination, which was unanimously agreed said: "Through her passion, dedication, and tireless efforts, Dame Norma Redfearn has left an indelible mark on North Tyneside." She said the former mayor "really did make North Tyneside a great place to live, work, and visit."The position of mayor is an elected role and is effectively the leader of the Norma announced her decision last year not to seek re-election, marking the beginning of the end of her 12 years in narrowly retained the mayoralty for Labour in May after beating Reform UK by a thin margin. Dame Norma's administration saw the regeneration of large parts of Whitley Bay including the re-opening of the long-disused Spanish City Dome. She also played a key role in regional devolution, which saw the creation of the North East Combined Authority and the North East elected to North Tyneside Council as a councillor for the Riverside ward in 2004, Dame Norma joined the cabinet and was responsible for the children and young people portfolio in was first elected as mayor in 2013, defeating the then Conservative incumbent Linda to her 20-year career in local politics, she spent 30 years as an educator, culminating as the head teacher of West Walker Primary the Conservative opposition supported the nomination, Tory councillor John Johnson lamented that the same honour was not bestowed to her late following clarification from the council's legal officer, it was determined the Freedom of the Borough could not be handed over posthumously, according to the Local Democracy Reporting Service. Follow BBC North East on X, Facebook, Nextdoor and Instagram.
Telegraph
2 hours ago
- Telegraph
Britain risks following France into a terrifying debt crisis
Last week brought more bad news about the UK's public finances. June's figures for public sector borrowing came in at £20.7bn, well above the OBR's forecast and City expectations. What's more, £16.4bn of this was accounted for by debt interest payments. Yes, that's right: £16.4bn in one month. We are borrowing enormous sums to pay the interest on past borrowings of enormous sums. We are getting dangerously close to what economists call 'the debt trap'. This is when, under the pressure of rising debt interest payments, the debt ratio starts to explode. It goes without saying that it is good to avoid this, if you can. But can we? Be warned, you may need a ready supply of hot towels for this next bit. The key players in the debt drama are: the budget deficit, the debt ratio, the growth rate of the economy in money terms (which is equal to the real growth rate plus the rate of inflation) and the rate at which the Government can borrow. If the rate at which the Government borrows exceeds the growth of the economy (in nominal terms), then debt interest payments and the overall debt will rise as a share of GDP. In order to stop this process from leading to an ever-higher debt ratio, the Government must run a primary budget surplus (meaning a surplus on its budget without interest payments), requiring higher taxes and/or cuts in government spending. And the higher the initial debt ratio, the larger the surplus needs to be to stabilise the debt ratio. The debt dynamics are merciless. When emerging market countries become stuck in the debt trap, the result is usually default or much higher inflation, or both. Remarkably, given our pitifully low to non-existent real growth rate, the nominal growth of GDP (i.e. expressed in money terms), exceeds the average rate at which the Government borrows by a small margin. Phew! But this is somewhat misleading because the average cost of government debt is heavily influenced by past borrowing, some of which was at lower interest rates. When this debt matures, there is a risk that it will be refinanced at higher interest rates. So we are currently just avoiding the debt trap, but with the deficit so large, the debt ratio is still rising. In these circumstances, it is hardly surprising that the gloom is still gathering about the fiscal prospects that the Chancellor faces in the Budget this autumn. It hardly makes our position any better, but we are not alone. Amid all this domestic pessimism, few people have noticed what is happening to our close neighbour across the channel. France is facing a fiscal predicament every bit as serious as ours. For a start, France's ratio of government debt to GDP is higher than ours – 113pc of GDP compared with our 100pc. And its deficit is higher too – 5.8pc last year compared to our 5.1pc. And ours is set to be just under 4pc this year. In both countries, GDP growth has been weak, and prospects are clouded with uncertainty. The one area where France is better positioned is the cost of borrowing, and this really does show the weakness of the UK's position. Whereas 10-year bond yields here are 4.6pc, in France they stand at about 3.5pc, similar to other euro-zone members. In this regard, however, something extraordinary has been happening. French yields have been converging on Italy's. The gap between them is now only 0.18pc, the lowest for almost 20 years. It doesn't seem too fanciful to imagine that French yields will soon surpass Italy's. Admittedly, after a recent period of comparatively strong growth, it looks as though Italian economic growth is set to be slower than growth in France, returning to the long-established norm. That certainly does not make the job of stabilising the public finances any easier. And, at 135pc of GDP, Italy's debt ratio is a good deal higher than in France. But Italy possesses two striking advantages. First, its fiscal deficit is only 3.4pc of GDP, compared to France's 5.8pc. And excluding interest payments (the so-called primary budget), it is in a surplus of 0.5pc, compared to France's deficit of 3.7pc. The result is that to stabilise the debt ratio, Italy needs to tighten the budget deficit (through a mixture of higher taxes and expenditure cuts) by only 0.5pc of GDP. By contrast, to stabilise her debt ratio, France needs to tighten fiscal policy by over 3pc of GDP by 2027. Italy's second advantage is surprising to anyone who has followed Italian politics over the past 80 years. She seems to be more politically stable than France. Giorgia Meloni looks likely to be Italy's first post-war prime minister to complete their term. In France, there have been six prime ministers since 2020, and the current incumbent, Francois Bayrou, who heads a minority government, could be ousted any time soon. He recently announced a plan to tighten French fiscal policy by 1.5pc of GDP. By comparison, Rachel Reeves' Budget last October increased taxes by 1.2pc of GDP, but this was more than offset by increases in public expenditure. There is little chance of the proposed French tightening getting through parliament unscathed. The failure to pass a budget for next year, leading to the fall of the present government, could cause French bond yields to flare up. And then there is the presidential election in 2027. On voting intentions in the first round, Jordan Bardella, the likely candidate of Marine Le Pen's National Rally, is well ahead of the other candidates. Obviously, there's many a slip twixt the cup and the lip. But if the markets were to view a victory for the National Rally as likely, then they would surely send French bond yields much higher, thereby putting France in a dangerous fiscal position. We cannot gloat. There but for the grace of God go all of us.
