Keir Starmer is bracing for an ‘absolute horror’ clash with Labour MPs on moves to cut the spiralling benefits bill

The benefits bill has been rising and is forecast to continue going up

Touring broadcast studios this morning, Treasury minister Emma Reynolds tried to play down tensions but again stressed the moral case for getting people off benefits and back into work.

She swiped that Labour colleagues were ‘jumping to conclusions about our plans before they’ve heard them’.

But left-winger Diane Abbott demanded minister raise extra money from a ‘wealth tax’ instead of cutting welfare.

‘I would introduce the wealth tax. If you brought in a wealth tax of just 2 per cent on people with assets over £10million, that would raise £24billion a year. That’s what I would do,’ she said.

Ms Kendall is expected to set out plans for reform tomorrow after Sir Keir branded the rising burden ‘unsustainable’. They were originally mooted as saving £5billion a year for the Treasury, including £1billion reinvested in supporting people back to jobs.

However, the announcement has been pushed back a week as the premier tries to quell a prospective revolt.

No10 has been holding ‘engagement sessions’ to explain the changes, but they have been dismissed as ‘a tick box exercise’ by some Labour MPs.

One MP told the Guardian that they were anticipating the coming days with ‘absolute horror’.

It is unclear whether there will need to be a vote on the benefits changes if PIP is not going to be frozen in real terms – in a possible relief for Downing Street.

Ministers point to the number of people in England and Wales claiming either sickness or disability benefit having soared from 2.8million to about 4million since 2019.

The benefits bill has risen with this increase, reaching £48billion in 2023-24.

It is forecast to continue rising to £67billion in 2029-30 – more than the current schools budget.

Health Secretary Wes Streeting said yesterday that the full proposals are yet to come before Cabinet – where several ministers previously voiced concerns.

He told the BBC: ‘What I do know is the Work and Pensions Secretary wants to support people who need help the most, and we’ve got to make sure that there is a wide range of support and that everyone’s playing their part.’

Writing in The Times, Mr Burnham said he agreed that the welfare system needed ‘a radical overhaul’, but said the Government should focus on helping people into work rather than simply cutting benefits.

The mayor – often tipped as a successor to Sir Keir – said: ‘I would share concerns about changing support and eligibility to benefits while leaving the top-down system broadly in place. It would trap too many people in poverty.

‘And to be clear: there is no case in any scenario for cutting the support available to disabled people who are unable to work.’

Over the weekend, Government sources indicated that Ms Kendall’s reforms would include a ‘right to try guarantee’ allowing disabled people to enter employment without risk of losing their benefits if it did not work out.

Downing Street said Sir Keir ‘has been clear there is both a moral and an economic case for fixing our broken social security system that’s holding our people back, and our country back’.

‘Three million people are out of work for health reasons, and one in eight young people not currently in work, education or training,’ the PM’s spokesman said.

‘So we’ve got a duty to fix the system, to ensure that that safety net is always there for the most vulnerable and severely disabled, but also supports back into work, rather than leaving people written off.’

He added: ‘That is why tomorrow the Government will set out plans to overhaul the health and disability benefits system so it supports those who can work to do so, while protecting those who are most in need, and put the welfare system back on a more sustainable path.’

Asked if the reforms were being carried out because of the UK’s fiscal backdrop, the spokesman replied: ‘No, I think when you look at the fact that we have the highest level of working-age inactivity due to ill health in western Europe, we’re the only major economy whose employment rate hasn’t recovered since the pandemic, there is a duty to fix the broken system that is letting millions of people in this country down.’

But Conservative shadow work and pensions secretary Helen Whately said Labour was ‘divided’ over welfare and ‘cannot deliver the decisive change we need’.

She said: ‘The Government’s dithering and delay is costing taxpayers millions every day and failing the people who rely on the welfare system.

‘Under new leadership, the Conservatives are the only party united in the need to reduce spending on benefits – which is why we committed to save £12 billion-a-year from the welfare bill which Labour scrapped. Labour must come forward with a serious plan to deliver savings.’

Ms Reynolds was asked on Sky News this morning whether MPs should fall in line.

She told the broadcaster: ‘We have a big majority, we are a Government that secured a mandate for change.

As tensions mount ahead of the plan being unveiled tomorrow, Manchester Mayor Andy Burnham has warned the PM that reducing eligibility would leave people ‘trapped in poverty’

‘It is absolutely everyday business that we should have discussions with backbenchers, meetings between our MPs and ministers happen all day, every day. So this isn’t something that is any different, but we’re determined to strike the right balance here.

‘We’ve got to reform a system that is failing everybody, and we’ve got to do that according to our values.

‘As Liz Kendall has said, there is a Labour case for reform here, because too many people are locked out of the labour market market, and there is dignity in work, and we want people to to get back into work if they can.’