In 2015, when Labour’s acting leader Harriet Harman announced that the party would not vote against the Conservatives’ Welfare Bill, there was one leadership candidate who defended her: Liz Kendall. “People said to us: ‘We don’t trust you on the money, we don’t trust you on welfare reform,’” Kendall remarked then. “If we are going to oppose things we have to put something else in its place because if we carry on making the same arguments we have done over the last five years we will get the same result.”
Kendall did not win the battle – finishing last in the leadership contest – but she did, like a Labourite Barry Goldwater, win the war. A decade on, Kendall yesterday announced what the Institute for Fiscal Studies called a “fundamental break from the past few decades of welfare policy”.
The Work and Pensions Secretary, who was flanked by Keir Starmer and Angela Rayner in a show of support, delivered a less austere statement than originally anticipated. Personal Independence Payments (PIPs), she announced, would not be frozen, abandoning a measure that even George Osborne blanched at. The Universal Credit Standard Allowance would rise by £775 in cash terms by 2029/30 – the biggest permanent real-terms increase in out-of-work support since 1980. Employment support would be boosted by £1bn (a victory for Kendall over a more sceptical Treasury).
Kendall also promised to consult on the introduction of a new, more generous form of “unemployment insurance” – a measure designed to revive the “something-for-something” contributory principle (back in 2013, one of her current advisers, Graeme Cooke, floated a version of this policy in the New Statesman).
But none of this could disguise what Kendall ultimately announced: the biggest welfare cuts since Osborne occupied the Treasury in 2015 (totalling £5bn). Though an impact assessment has not yet been published – to the anger of Labour MPs – the Resolution Foundation detailed what the changes to PIP eligibility mean: between 800,000 and 1.2 million people losing support of between £4,200 and £6,300 per year by 2029-30. “Too many of the proposals have been driven by the need for short-term savings to meet fiscal rules, rather than long-term reform,” concluded the institution led until last June by Torsten Bell, now a minister in Kendall’s department. “The result risks being a major income shock for millions of low-income households.”
Here is precisely why a Labour revolt is still brewing. Though initial estimates that 80 MPs would rebel have proved overstated, as many as 40 are still threatening to do so (a vote is anticipated in May). “A lot of people are very upset,” one told me.
There were numerous signs of this as Kendall addressed the Commons – with concern stretching beyond the traditionally mutinous Socialist Campaign Group. Debbie Abrahams, the Work and Pensions Select Committee chair, argued that “there are alternative and more compassionate ways to balance the books, rather than on the backs of disabled people”. Neil Duncan-Jordan, who became the MP for Poole last year, warned against “cutting the benefits of the most vulnerable people in our society”. Polly Billington, a former aide to Ed Miliband, asked how “reducing support for those who struggle to wash and dress themselves” would help tackle worklessness. Clive Efford, who leads the large centre-left Tribune Group, implored the government to do more to tax wealth.
No 10, as I reported at the start of this week, is confident that it is on the right side of public opinion. It believes that “the vast majority of voters” will not be content with a system in which, as Starmer told the cabinet yesterday, one in eight young people are not in employment, education or training and one in ten working-age people are now claiming at least one type of health or disability benefit (there was “nothing progressive” about this, the Prime Minister said).
And polling by YouGov duly shows that 68 per cent of the public believe the benefits system works badly and needs reform, while only 18 per cent believe it does not. But the nuance in public opinion is worth noting: 45 per cent believe that people with a disability receive too little support, while only 10 per cent believe they receive too much. When disability activists take to the streets, they may – as they did under Tony Blair – attract much sympathy.
Starmer’s allies know that there is political peril in being seen as too tough on the vulnerable. He will not, they say, “punch down” or use “derogatory language” – think “strivers” vs “scroungers” – of the kind that became associated with the Conservative years. But as MPs and voters absorb the full implications of the cuts, the greatest test lies ahead.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[See also: Keir Starmer’s righteous war against the Blob]
Content from our partners
Related
