Hundreds of thousands of people with mental health or mobility issues will be told to look for opportunities to work from home or face having their benefits reduced, The Times reported.
“We believe in the inherent dignity of a good job, and we believe that work, not welfare, is the best route out of poverty,” Mr Sunak said in his speech.
The Telegraph has been told that the pensions triple lock will be untouched, with state pensions rising in line with average earnings, in a boost to 12 million older Britons.
The Prime Minister sees his approach – first cutting inflation, then cutting tax – as following that of Margaret Thatcher, as he seeks to cast himself as her ideological heir.
He had faced anger from MPs on the Right of his party last week following the sacking of Suella Braverman as home secretary and with the Tories still languishing behind Labour in the polls.
Mr Sunak also used his speech on Monday to launch a fresh line of attack on Labour, warning that Sir Keir Starmer’s borrowing plans would provoke a fallout similar to that caused by Liz Truss’s mini-budget last autumn.
The Prime Minister singled out Labour’s plans to eventually invest up to £28 billion a year in green projects, saying it “makes the same economic mistake as last year’s mini-budget”.
Focus on growth
The speech marked a substantial change in Mr Sunak’s economic approach, with the focus now on growth rather than reducing inflation, after achieving his promise to halve the rate at which prices are rising.
It also hinted at the economic dividing lines that will be drawn in the election campaign to come, with No 10 insiders arguing the differences between the two main political parties are much starker than appreciated.
Mr Hunt, who appeared at a CBI event in London on Monday, also struck an upbeat note on the state of the economy. He said: “I feel a lot more positive about the UK economy than I did a year ago when I came in. The biggest reason is because we have managed to halve inflation – 11.1 per cent inflation, which it was this time last year, is terrifyingly high. We’ve had to do some very difficult things to get it back under control but I hope now people can see we are making progress on that, I will be focusing on growth.”
The Treasury has more money to play with in the Autumn Statement than was expected, with persistent inflation leading to higher tax revenues than forecast. The so-called “fiscal headroom” had been £6.5 billion in spring, but forecasters now believe it is £25 billion.