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The Independent
an hour ago
- Business
- The Independent
Starmer's authority isn't the only thing badly dented by his benefits climbdown
When Labour took office a year ago, ministers proclaimed that 'the grown-ups are back in charge' and 'stability will replace Tory chaos'. But Keir Starmer's government looked anything but stable this week. His authority as prime minister has been badly dented by his spectacular climbdown over £5bn of welfare cuts. He looks more like the follower of his mutinous MPs than leader of the Labour Party. Starmer can no longer take their support for granted after they forced U-turns on winter fuel payments and now sickness and disability benefits. Once MPs in any party rebel, they are more likely to do it again – and the welfare rebellion worked brilliantly. As one Labour source told me: 'Many of the newbies [the 2024 intake] think they are only here for one term, and are not going to become a minister because there are not enough jobs to go round. They have nothing to lose by standing up for what they believe in.' This is a big moment. It will make it harder to win approval for the 'tough decisions' Starmer believes are needed to 'renew' Britain. It will mean more of the 'sticking-plaster solutions' he vowed to avoid. Treasury plans for further welfare savings will probably have to be shelved. The £4bn estimated cost of the winter fuel and welfare U-turns makes tax rises in the Budget this autumn even more likely. The same group of more than 120 Labour MPs, spanning the soft and hard left, will demand the abolition of the two-child benefit limit and now have the muscle to get it. Starmer needs to rebuild bridges with his MPs and somehow find time to listen to them, despite his unavoidably huge foreign affairs workload. His MP critics view him as remote and were rightly furious he dismissed them as irritating ' noises off'. He can't do the TLC all by himself and needs to improve his Downing Street operation. His MPs should be seen as an asset to sell the government's message, not treated as lobby fodder. The PM and a long-overdue heavyweight economic adviser in No 10 will need to keep Rachel Reeves on a tighter leash; she, rather than Liz Kendall, the work and pensions secretary, was the architect of the panicky welfare cuts, as she struggled to stick to her fiscal rules in March. The chancellor is making too many mistakes. Some at Westminster detect more fundamental lessons. As the crisis on welfare deepened, some ministers muttered in private that the UK is virtually ungovernable in a social media age, when politics has sped up and impatient voters want change yesterday. If they don't get instant gratification, they will shop around. Traditional party loyalties are shattered, as illustrated by Labour's unprecedented decline since last year's election, Starmer's disastrous personal ratings and Reform UK's rapid rise. These ministers noted that a landslide – Boris Johnson's majority of 80 in 2019, or Starmer's current working majority of 165 – does not guarantee stability in the febrile new world. Voters make ever greater (sometimes contradictory) demands on politicians, but their trust in the system of government has slumped to a record low, the British social attitudes survey found this week. True, governing has got harder since I moved to the Westminster village in 1982. A ravenous media also demands instant solutions. Governing is even more difficult when there's little money to throw at problems, as is the case today. But I think Starmer's grumbling ministers protest too much. After all, Labour won power on a one-word promise: change. The party can hardly complain that the public wants to see it happen quickly. The U-turns symbolise a broken system. Labour figures, Starmer included, are rightly frustrated by a slow Whitehall machine. Structural changes would help, as I argued a week ago. But the winter fuel and welfare cuts were political choices. Indeed, critics of the system think ministers need to look in the mirror. Munira Mirza, a former head of the No 10 policy unit who chairs a new, non-party group called Fix Britain, says professional politicians are 'rank amateurs' and ministers sometimes 'shockingly out of their depth'. She has a point. A widespread perception the system isn't working is very good news for Nigel Farage. Reform overtaking Labour reflects a trend across western countries: populists are now winning 30 per cent of the vote and centre-left parties 24 per cent. The influential IPPR think tank says centre-left parties must 'reinvent themselves or die', as voters view them as defending an indefensible status quo. It believes the answer is not to ape the populist right, as Starmer sometimes seems to do, or return to Blairism; instead, the IPPR will try to devise a new modern identity. Starmer's government needs all the help it can get from the Fix Britain and IPPR projects. But experts and think tanks can't tell politicians holding a blank page what they believe. In the Blair-Brown and Cameron-Osborne eras, there was a governing project; even if voters disagreed with it, they knew what the government was about. As one Labour insider told me: 'For Boris Johnson and Keir Starmer, a landslide didn't bring stability because they didn't know what they wanted to do with it.'
The Guardian
13 hours ago
- Politics
- The Guardian
‘A negotiated dog's dinner': Starmer faces second revolt over welfare bill concessions
Keir Starmer is battling to stem the revolt over his cuts to disability benefits, with about 50 Labour MPs concerned the concessions will create a 'two-tier' system where existing and newly disabled people are treated differently. Senior government sources insisted things were 'moving in the right direction' for No 10, with the whips calling round backbenchers to persuade them to get behind the bill on Tuesday. Government insiders believe they have peeled off enough of the 120-plus opponents of the legislation to win the vote, after the work and pensions secretary, Liz Kendall, promised to exempt current disability claimants from the changes, and increase the health element of universal credit in line with inflation. However, rebel MPs will attempt to lay a new amendment on Monday giving colleagues a chance to delay the bill, which will still involve £2.5bn of cuts to future disability benefits. The continuing row over the reforms will likely blight the week that will mark the first anniversary of Labour's return to power. In an interview yesterday, Starmer admitted to a range of mistakes – including using the phrase 'an island of strangers' in an immigration speech, and of hiring his former chief of staff Sue Gray. His government has made a series of U-turns in the last 12 months – but his handling of the welfare bill might be the most damaging episode of them all. Starmer will next week be hoping to draw a line under the difficult period, which has also seen the government reverse cuts to winter fuel payments and change course over holding an inquiry into grooming gangs. Dozens of Labour MPs are continuing to speak out against the welfare cuts on a Labour WhatsApp group, with many MPs still undecided about how they will vote and pressing for more assurances that it is ethical and legal to set up a division between current and future claimants. Disability charities are warning that the bill is still 'fatally flawed' and will lead to an 'unequal future' for different groups of disabled people, making life harder for hundreds of thousands of future claimants. Starmer defended the bill on Friday, saying it strikes the right balance. The changes will protect 370,000 existing recipients who were expected to lose out after reassessment. 'We talked to colleagues, who've made powerful representations, as a result of which we've got a package which I think will work, we can get it right,' the prime minister said. Asked how the government would pay for the £3bn of concessions, which experts believe will have to be funded by tax rises or extra borrowing, Starmer replied: 'The funding will be set out in the budget in the usual way, as you'd expect later in the year.' There would need to be at least 80 rebels to defeat the bill, and government sources are quietly confident they have given enough ground after Meg Hillier, the chair of the Treasury committee, said she would back the legislation following changes. However, others are unconvinced. One leading rebel said 'everyone but a handful of people is unhappy', even if they do end up reluctantly backing the changed legislation, while another expressed frustration that No 10 and the whips were 'trying to bounce people into agreeing before we've seen enough details'. Rachael Maskell, the Labour MP for York Central, who is one of the leading opponents of the bill, said: 'They are going to have to go back to the negotiating table … deaf and disabled people's organisations [DDPOs] are rejecting these changes as it fails to address future need and gives no security for people with fluctuating conditions, for instance where people are in remission.' Other critics who plan to vote against the bill include the MP for Crawley, Peter Lamb, who said: 'Despite many improvements to the system set out in the bill, at its core the bill remains a cost-cutting exercise. No matter the level of involvement of disability groups in co-producing a scheme for new applicants, to save money the new scheme has to result in people with high levels of need losing the support necessary to wash themselves, dress themselves, and feed themselves.' Sign up to Headlines UK Get the day's headlines and highlights emailed direct to you every morning after newsletter promotion Simon Opher, the MP for Stroud, also said he still opposed the bill: 'The changes do not tackle the eligibility issues that are at the heart of many of the problems with Pip [personal insurance payments]. The bill should be scrapped and we should start again and put the needs of disabled people at the centre of the process.' Diane Abbott, a leading figure from the left of Labour, said the rebellion was 'far from over', while another Labour MP said: 'The bill starts from the premise of cuts, not reform. It's also arse about face in terms of impact assessments and co-production. It's simply a negotiated dog's dinner. In that sense, nothing has really changed except the fact they've negotiated more misguidedly to sign up to it.' One thing Labour MPs are pushing hard for is more clarity on the review of how the Pip system works, due to be done by the autumn by Stephen Timms, a work and pensions minister. Many expect that process to change the points system from what has been proposed so far. Some in the party also want Starmer to reinstate Vicky Foxcroft, who quit as a whip to vote against the bill before the U-turn was made. Stella Creasy, a leading Labour MP who had initially signed the amendment to delay the bill, said she wanted to see more details. 'The concern is to get to be workable … We need to understand why we would treat one group of claimants differently from another,' she added. Another Labour MP, from the 2024 intake, said: 'I'm waiting to look at the details before making any decisions. Many are in the same place as me and need to get something more than a midnight email on an issue of this much importance to hundreds of thousands of people'. The Labour MPs opposed the changes are citing a fundamental rejection of the idea that a Labour government will be making disabled people worse off. But at the same time, many of them have also been alienated by what they say is a No 10 operation that is out of touch with how the parliamentary party is feeling, and has tried to strongarm MPs into backing the legislation by threats and promises of preferment. 'Goodwill has been lost and there is still huge suspicion about whether they will try and pull a stunt at the last minute,' said one Labour MP. The majority of disability charities and campaign groups were on Friday still opposed to the cuts. The disability equality charity Scope said that despite concessions, an estimated 430,000 future disabled claimants would be affected by 2029/30. Its strategy director, James Taylor, said: 'It is encouraging that the government is starting to listen to disabled people and MPs who have been campaigning for change for months. But these plans will still rip billions from the welfare system. 'The proposed concessions will create a two-tier benefits system and an unequal future for disabled people. Life costs more if you are disabled. And these cuts will have a devastating effect on disabled people's health, ability to live independently or work.' A coalition, including Disabled People Against Cuts, said: 'Disabled people and disability rights groups totally reject the performative politics being enacted by the government, in response to being challenged by a growing MP rebellion and a tidal wave of anger from the public. 'We will not sell out generations of disabled people past and future by accepting this sham of alleged concessions on welfare spending so that they can save face. The reforms are ill thought out, and MPs still do not have a full understanding of their implications and impact.'
BBC News
16 hours ago
- Business
- BBC News
We've got the right balance, says Starmer after benefits U-turn
Sir Keir Starmer has said his welfare reforms strike "the right balance" after making concessions to his own backbench government's initial plans, aimed at bringing down the welfare bill, would have made it harder for people to claim personal independence payment (Pip), a benefit paid to 3.7 million people with long-term physical or mental health conditions. However, faced with a growing rebellion from Labour MPs and a likely defeat in the Commons, the government announced the stricter criteria would only apply to new claimants."We've talked to colleagues who made healthy representations as a result of which we've got a package which I think will work," he said. Speaking to broadcasters, Sir Keir said: "We need to get it right that's why we've been talking to colleagues and having a constructive discussion."We've now arrived at a package that delivers on the principles with some adjustments and that's the right reform and I'm really pleased now that we're able to take this forward."The government originally hoped to save £5bn a year by 2030 with its Universal Credit and Personal Independence Payment Bill, aiming to slow the rise in health-related benefits are estimated to cost an extra £30bn by 2029 without the government faced growing discontent from around 120 of its own MPs over the changes. While the rebels told the BBC their colleagues are happy with the concessions, some Labour MPs have said they will still vote against the proposals.
BBC News
17 hours ago
- Business
- BBC News
What do UK welfare reforms mean in Scotland?
The UK government has confirmed it will scale back its planned welfare reforms in a bid to fight off a rebellion by backbench Labour MPs.A third of the Scottish group of Labour MPs were among the 120-odd who signed an amendment calling for the changes to be with much of social security devolved to Holyrood, what do the concessions now made by Sir Keir Starmer mean in Scotland?Details are still being confirmed ahead of votes at Westminster next Tuesday. But the headline is that instead of tightening who is eligible for certain disability and sickness benefits straight away, planned cuts will only hit future has its own devolved social security system, which puts limits on the direct impacts for people Credit still applies across the UK, so reforms to that will affect Scottish claimants. Or, to be exact, future claimants of the health element. Anyone currently in receipt of this will continue to get it, but anyone starting a claim in future may be assessed more the same cannot be said of the other major target of the reforms, the Personal Independence Payment (Pip).As of this summer, everyone who was on Pip is due to have been transferred to the Scottish equivalent, the Adult Disability Payment (ADP).There are still some outstanding questions. Citizens' Advice Scotland has questioned whether ADP will have the same "passporting" capacity as Pip, where eligibility for one benefit can provide access to others at a UK this is the kind of detail which will become clearer once legislation is amended at Westminster and as backroom officials get their heads together to iron out how things will work in practice. Social Justice Secretary Shirley-Anne Somerville has been clear that the Scottish government "will not follow Labour's lead on any of these changes".We essentially have two governments moving in different directions when it comes to social of the latest U-turn, the UK government is still keen to get a grip on welfare spending in light of a forecast £30bn increase in the cost of working-age health-related watchword has long been about getting people back into work and keeping budgets from ballooning in future the Scottish government prides itself on taking a more generous has set up new offerings like the Scottish Child Payment, currently set at £27.15 per week for eligible modelling suggests that policy alone will keep 40,000 children out of relative poverty this year. How much does Scotland spend on social security? Ministers have also uprated benefits by inflation each year - including the new winter fuel payment, allowing them to trumpet that it is a more generous offering than that available down south, even if the difference is only £ security thus accounts for an increasingly large share of the Scottish government's Scottish Fiscal Commission says spending on it was £6.1bn in latest forecast for next year is £7.7bn, and the figure is due to pass £9bn by Adult Disability Payment makes up the lion's share of that figure, with the cost set to hit £5bn by the end of the almost ten times more than the Scottish Child Payment (£517m in 2029-30), and almost thirty times more than the devolved winter fuel payment (£174m) - benefits which politicians spend far more time talking a reminder that there can be a big difference between the political importance of a policy and the financial weight of key question is how this is all going to be paid the end of the day John Swinney has the same problem as Sir Keir Starmer - budgets are finite, and costs are on social security in Scotland is already £1.2bn higher than the block grant which comes from Westminster. The gap is forecast to grow to £2bn by £2bn that the Scottish government has to find elsewhere in its budget. Or raise from if the UK government does ultimately reduce its welfare spending, that will in turn reduce the amount of funding flowing to Holyrood and widen the financial gap. Sir Keir's original plan was to save £5bn by 2030. Some analysis is suggesting the cuts may be closer to £3bn government officials are already scratching their heads about what this means for their own have fluctuated quite a bit as policy has shifted at Westminster, so it's hard to predict what the figures will be until the chancellor announces if we remain in a position where the UK government is seeking to cut its welfare bill while the Scottish government's one increases, it's obvious that the financial gulf is going to SNP administration has already leaned on its powers over income tax to fund some of this extra spending, with ministers again proud to talk about a more "progressive" system that asks those with the broadest shoulders to pay more to support public Finance Secretary Shona Robison has been clear that they can't keep going back to the well on that front. Further tax rises have already been ruled out for the rest of this parliamentary they have embarked on a programme of public service reform, which includes targets to reduce the public sector workforce by 0.5% per year and to cut the cost of running government and public bodies.A previous commitment to universal entitlements has also fallen by the wayside. When setting up the Scottish version of the winter fuel payments, ministers had insisted on a universal approach - at the very least a payment to all households, if not all individual they have now decided to copy the UK government's model of automatically clawing back payments from better-off households, and targeting funds at those most in the end of the day, all of this feeds into the politics of next year's Holyrood election, with the SNP and Labour already locked in a fierce battle for a fairly similar chunk of the Swinney built his efforts to turn around the SNP's fortunes after last year's general election drubbing on a pledge to mitigate the two-child cap on some UK benefit this is something which has a much bigger political impact than a financial one. The Scottish Fiscal Commission (SFC), which provides independent economic forecasts, reckons this will cost about £200m a year by the first minister has not missed an opportunity to hammer home his message that the SNP will be more generous to Scottish voters than Labour is being at Westminster. What will this mean at the polls? His party's campaigning is based very heavily on its record of big-state interventions and universal entitlements.A leaflet they circulated during last year's election campaign listing the SNP's achievements in office gave prominent place to the Scottish Child Payment, alongside free tuition; free personal care; free prescriptions; free bus travel; free school lunches; free baby boxes and free meanwhile, have majored on responsible stewardship of the public finances in their UK Scottish leader Anas Sarwar is not promising a tax-and-spend approach at says he'd ideally like to cut the tax burden, while maintaining spending on public services by growing the these are two parties which face similar problems in government - tight budgets, weak growth and spiralling answers they provide - and the extent to which voters trust them to deliver on them - are going to play a critical role in next May's election.
The Independent
18 hours ago
- Business
- The Independent
What benefit claimants need to know about Labour's welfare U-turn
Labour ministers have announced two major changes to their controversial welfare reforms amid intense criticism over the measures. Over 120 Labour MPs were threatening to rebel against the government over its 'Universal Credit and Personal Independence Payment Bill' which is still set to be voted on by members on Tuesday. Writing to Labour MPs on Thursday evening, work and pensions secretary Liz Kendall said: 'These important reforms are rooted in Labour values, and we want to get them right.' 'We have listened to colleagues who support the principle of reform but are worried about the impact of the pace of change on those already supported by the system.' The piece of legislation will still bring in the two key changes to Universal Credit and the Personal Independence Payment (PIP). However, tweaks have been made to ensure that existing claimants have greater protections than first promised. Here's everything you need to know: What PIP claimants need to know The central cost-cutting measure remains a tightening of the eligibility to be awarded PIP. Currently claimed by 3.7 million people, the benefit is designed to help with extra costs related to health or disability. Under the changes, around 1.5 million of the current claimants would not be found eligible for the 'daily living' side of the benefit. This is because, while they scored the eight points needed at assessment to be awarded at least the lowest payment rate, they did not score four in any single category. Initially, Labour had pledged to give transitional protection to any claimant who was reassessed and found ineligible for the benefit because of the changes. This meant they were guaranteed the same payment rate for 13 weeks. Ms Kendall has now confirmed that all existing claimants will not be subject to the new criteria. While they will still be subject to reassessment – happening every three years on average – they will not have the requirement to score four points in a single category. This means it is advisable for anyone who thinks they might be eligible for PIP to apply for it as soon as possible. And at least before November 2026 when the changes would come in to effect. This can be done on This means that around 370,000 claimants are expected to have an average £4,500 protected, research from the Resolution Foundation finds. What Universal Credit health claimants need to know The other key change in the bill sees the rates of Universal Credit changed, with the standard rate rising while the health-related rate is cut back. The plans would bring in an across-the-board increase to the standard Universal Credit allowance for new and existing claims from April 2026. This will be a boost of £7 a week, to £106. But at the same time, the payment rate for the health-related element of Universal Credit was due to be frozen at £105 a week until 2029/30. However, Ms Kendall has confirmed that the income of existing claimants will be protected in real-time, meaning it should at least rise with inflation. This will also apply to any new claimant meeting the severe conditions criteria. The Resolution Foundation estimates that this will 'insulate 2.25 million people from a loss of between £250 and £500 per year.' However, the government has not made any concession on its plan to cut the Universal Credit health element for new claimants to £54 a week – a rate of almost half. Charities and campaigners have criticised the government's concessions over the bill as threatening to create a 'two-tier' system. This is because those currently claiming PIP and Universal Credit health will benefit from more generous rules and rate than new applicants after the changes come into effect. Responding to the concessions, Charles Gillies, senior policy officer at the MS Society and policy co-chair of the Disability Benefits Consortium, said: 'These supposed 'concessions' to the cuts bill are just a desperate attempt to rush through a disastrous piece of legislation. 'By pushing the cuts onto future claimants, the government are betraying the next generation of disabled people. Why should someone who needs support to wash in 2025 be entitled to PIP, but not someone who has the same needs in 2035?'
