Former 'Cost of Living Tsar' Urges Welfare Overhaul in Budget

Lord Walker, a Labour peer and the chairman of Iceland supermarket, has called for a significant overhaul of the welfare system ahead of Chancellor John Healey's upcoming Budget. Walker, who previously served as the government's 'cost of living tsar,' stated, 'I joined the Labour Party, not the benefits party,' emphasizing his belief that work provides dignity and independence.

Walker is advocating for measures that would make work more financially appealing for individuals currently on long-term benefits. He proposed a 'meaningful cash reward' for those who transition from benefits to employment and maintain their jobs. Additionally, he urged the Chancellor to reduce employment costs for younger workers by offering tax relief to companies that hire them.

In a bid to stimulate economic growth, Walker also called for a reduction in corporation tax for smaller businesses and entrepreneurs. He expressed concern over the current situation, noting that 'one in seven households has nobody in work' and that approximately 1.3 million children are growing up in households where no one is employed. He further highlighted that a quarter of a million children live in homes where no one has ever worked.

Walker acknowledged the necessity of protecting individuals who are genuinely unable to work, stating, 'That’s what a decent society does.' However, he argued that allowing people to remain on benefits when they could be working is not compassionate and ultimately fails them. He suggested a combination of incentives and, at times, stricter measures, advocating for rewards for both employees who move into work and employers who provide opportunities.

Despite Walker's calls for immediate welfare reforms in the Budget, reports indicate that the government may delay significant welfare changes. Chancellor Healey is expected to receive two reports next month – one on youth inactivity and another on disability benefits – with proposed reforms anticipated next year. This approach aims to prevent welfare reform from overshadowing the upcoming fiscal event.

Walker, son of Iceland's founder Malcolm Walker, was appointed as Keir Starmer's 'cost of living champion' in February. Previously, he had expressed ambitions to be a Conservative MP but switched his allegiance to Labour in 2023. He attended the launch of Labour's manifesto for the 2024 general election and has offered critiques of the government's early performance, including former Chancellor Rachel Reeves' tax policies. He received a life peerage earlier this year.