Starmer ready to concede on welfare reforms
Keir Starmer has signalled that he is prepared to water down his plans to impose the biggest benefits cut in a decade, after 126 Labour MPs backed an amendment to the government’s welfare bill that would have effectively killed the legislation outright.
Speaking in the Commons today, Starmer confirmed that he is in talks with Labour rebels and looking at what “improvements” can be made to the legislation, adding that any welfare reforms must comply with “Labour values of fairness”.
“All colleagues want to get this right, and so do I... the conversation will continue in the coming days”, he added.
Starmer had little choice but to attempt to placate his dissenting MPs. The second reading of the welfare bill takes place on Tuesday and the sheer number of Labour MPs backing the “reasoned amendment” would have been enough to stop the bill progressing through parliament, resulting in a humiliating defeat for the PM. Up to a dozen ministers are also understood to have privately warned him that they would resign over the welfare changes.
The disability benefits cuts contained in this bill are designed to save the Treasury £5 billion.
While the reforms also halve the health-related element of universal credit, the most contentious part of the bill is the reform that would make it harder for individuals to claim personal independence payments (PIP), the main disability benefit.
Backbench concern has focused on this tightening of PIP eligibility, and fears that the changes could deny payments to hundreds of thousands of individuals who struggle with washing, dressing, eating and going to the toilet. Many Labour MPs have also been critical that a proper impact assessment was not conducted before the proposed reforms were announced, nor was there any formal consultation with disabled people or their carers, making it difficult to understand the impact of some of these changes.
Liz Kendall, the work and pensions secretary, has defended the government’s plans, insisting that the most vulnerable would still be protected but welfare reform is required to incentivise work. The current system, in which jobseekers can double their income by being deemed unfit for any work, has created “perverse incentives”, she argued, while also highlighting the government’s £1 billion increase in back-to-work support.
Since the pandemic, there has been a sharp rise in long-term sickness, and the number of working-age people receiving PIP has more than doubled.
According to the government’s projections, if the growth continues at its current rate, the number of working age people claiming PIP is expected to increase from 2 million in 2021 to 4.3 million within five years, costing £34.1 billion annually.
The figures also show that over half of the post-pandemic growth in working age adults claiming sickness benefits is from individuals who are off-work due to mental illness.
These figures prompted former Tory Chancellor and Health Secretary, Jeremy Hunt, to chip into the welfare row today. Unusually for a politician, Hunt said he feared some of the policies he himself had brought in as Health Secretary had made the problem worse. In the Care Act, he had sought to make sure mental and physical health were treated equally. Yet, now looking at the vast rise in those off-work due to mental ill health, he admitted he was concerned that too many individuals with anxiety and depression were being signed off work when they would benefit far more from treatment and “social contact”.
As a result, Hunt concluded that welfare reform was necessary and Starmer and Reeves should “stick to their guns”.
Though it appears now that Starmer will soften his stance, and compromises will be thrashed out ahead of Tuesday’s vote.
Revolting Labour MPs will be keen to remind him of the government’s own assessment, published in March, which found that its planned welfare changes could push 250,000 people into relative poverty.
Welfare reform has always been a highly fraught policy area for Labour - or indeed any political party. During Tony Blair’s first year in office, a welfare row caused Frank Field - a minister Blair appointed in 1997 to "think the unthinkable" about social security - to resign, after falling out with the New Labour hierarchy.
Today, the woeful state of the public finances makes it arguably an even tricker task for Labour.
Whatever compromises are thrashed out ahead of Tuesday will make Rachel Reeves’s task of balancing the books in the Autumn Budget even less enviable.
Caitlin Allen
Deputy Editor
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