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The Guardian
02-07-2025
- Politics
- The Guardian
Welfare climbdown lets genie out of the bottle, and no one knows what happens next
A fortnight ago in a corridor near the House of Commons chamber, a close confidante of the prime minister smiled and shook his head when asked if the government could really lose the welfare vote. MPs would come to their senses, he predicted, because they would eventually understand that to fundamentally undermine the government's authority would have consequences which no one could control. Any pretence of stability and discipline would be over. Keir Starmer's own position would be questioned. And – he said – he did not believe that was what MPs really wanted to unleash. But intended or not, that is what has happened. There was a long-running joke during the election campaign that Starmer had a genie that was responsible for his run of good fortune. That genie is out of the bottle. And so, to Tory jeers, the chancellor, Rachel Reeves, was forced to sit on the frontbench during PMQs in obvious distress, staring into a £5bn black hole-shaped abyss. Many would say it is a mess of their own making – given the strength of feeling about the harm that the welfare bill would cause, the months of warning from disability charities and campaigners, and the mounting private anger of MPs which was communicated forcefully to the whips and then to the closed ears of No 10. There were endless chances to pause and do things differently. No Labour MP could seriously believe that there was a 'moral mission' to reform welfare – even if they agreed the system was dysfunctional – because of the timing of the announced cuts, which came because of the chancellor's severely limited headroom in the spring statement. But the consequences are far-reaching and for some they are unintended. There are, of course, some MPs who mounted the rebellion against the government who did intend to depose Starmer or Reeves or Morgan McSweeney, who want 'regime change' – without really knowing or understanding what that means – or who simply despise the government's overall direction. That was not the majority. For most it was a heartfelt desire to protect the most vulnerable, a conviction that this particular policy was wrong and that a new path could be found, without undermining the government on other issues. Allies of Reeves call that painfully naive. Inside both No 10 and the Treasury, there is seething anger at the backbenchers who have caused this very real collapse in the government's authority. It was deliberate on Wednesday morning that the Cabinet Office minister, Pat McFadden, was sent out to say explicitly on the airwaves that the forthcoming budget would have to pay for the painful U-turn. 'We could have bluffed through interviews this morning and said vaguely 'decisions will be taken in the budget', but we want to be honest, this means hard choices,' said one ally of Reeves. 'If Labour MPs want to be a part of the decision-making process in this way, which they obviously absolutely have the right to do, they therefore need to be brought into the hard choices we've got to take now.' But it will not just be tax rises, another senior official promised darkly. The welfare U-turn will also mean there will be far less money to spend on other progressive priorities. Top of the list is ending the two-child benefit limit which is now said to be at risk. Reasserting Reeves' authority to the markets is also key. Her emotional state at PMQs had an immediate effect on gilt yields, far more, bizarrely, than the actual £5bn U-turn, a sign that mere vibes of control and predictability is as important for a stable economy as material changes in policy. From a Treasury perspective – as long as it does not turn into something bigger – the bumpy day on the markets is almost a helpful reminder that their warnings about the potential for a Liz Truss-style meltdown are not exaggerated. The message now to both the markets and the parliamentary Labour party will be that order can be reasserted and tough times are coming. But the quiet part is that they really no longer have control over either. Labour MPs now know their own power. 'If the lesson they have learned from this is that now we need a punishment budget, Keir won't make it to next May,' one MP said. 'There is a window now to re-establish trust and tell a new story, he needs to take it.'
Yahoo
01-07-2025
- Business
- Yahoo
MPs to vote on welfare bill as unrest rumbles on
MPs will vote on the government's planned reforms to welfare later - with dozens of Labour MPs still planning to vote against them, despite concessions from ministers. The Conservatives have said they will oppose the plans as they are not "serious reforms". The rebellion's scale has ebbed and flowed. Last week, more than 120 Labour MPs signed an amendment that would have killed the proposals outright, an extraordinary threat of defeat for a government with a landslide majority. Now a replacement amendment, supported by disability charities, has attracted around 35 Labour MPs. It suggests that last-minute concessions may have reduced the potential for a government loss - but not comfortably. A number of MPs have expressed concerns about a promised review of personal independence payment (Pip) assessments, after Work and Pensions Secretary Liz Kendall announced on Monday that it would only report back around the same time that the proposed changes were introduced. Labour Chief Whip Sir Alan Campbell reportedly told a regular meeting of the parliamentary party last night that they should "act as a team" and government efforts at persuasion are expected to continue up until the vote itself, which is due this evening. Under the current government concessions people who currently receive Pip or the health element of universal credit will continue to do so. But future claimants will still be affected by the reforms. Chris Mason: Labour still has a big persuasion job ahead Welfare cuts: What are the Pip and universal credit changes? 'Disability welfare reforms could leave us worse off' The Conservative leader, Kemi Badenoch, told the BBC her party would vote against the measures "The benefits bill is too high," she said. "It was 40bn just before Covid. It is now projected to be a 100bn by 2030. And what Labour is doing is not making any savings at all. It's just reducing the rate of increase. That's why we are not supporting it." Other criticism of the government proposals has been diverse, with some saying the reforms will not be as effective as the government hopes. "I strongly believe that these kind of punitive measures of cutting welfare are not going to have the outcomes that we've been told they will," said Olivia Blake, Labour MP for Sheffield Hallam, who is disabled and opposes the reforms. "I think it will just be about saving money but will actually move spending into areas such as housing services, the NHS and social care," she told BBC Newsnight. Blake added that some MPs were still considering their vote, saying the rebellion would be "more significant than maybe people realise". Kendall defended the bill in the House of Commons on Monday, saying it aligned with MPs' shared values around providing support to those that could work while protecting those that cannot. Modelling published by Department for Work and Pensions suggested around 150,000 people might be pushed into poverty by 2030 because of the welfare cuts - lower than the original 250,000 figure estimated before the government made the concessions. Sir Stephen Timms is slated to conduct the report that was among the concessions. He told BBC Newsnight that the net effect of the government's policies would reduce poverty - including the measures to help people into work. He also stressed the need to make Pip sustainable in the future. The Conservatives have criticised the cost of the bill while the Liberal Democrats have called for proposals to be suspended so they can be further looked at. The government had hoped to save £5bn a year by 2030 before the concessions. These are now likely to cost around £3bn, according to the Resolution Foundation think tank. What has been driving the rise in disability benefit claims? Labour MPs press Kendall on rollout of benefit changes Welfare U-turn means we are in 'better position', says Streeting
BBC News
01-07-2025
- Business
- BBC News
MPs to vote on welfare bill as unrest rumbles on
MPs will vote on the government's planned reforms to welfare later - with dozens of Labour MPs still planning to vote against them, despite concessions from ministers. The Conservatives have said they will oppose the plans as they are not "serious reforms".The rebellion's scale has ebbed and flowed. Last week, more than 120 Labour MPs signed an amendment that would have killed the proposals outright, an extraordinary threat of defeat for a government with a landslide majority. Now a replacement amendment, supported by disability charities, has attracted around 35 Labour MPs. It suggests that last-minute concessions may have reduced the potential for a government loss - but not comfortably. A number of MPs have expressed concerns about a promised review of personal independence payment (Pip) assessments, after Work and Pensions Secretary Liz Kendall announced on Monday that it would only report back around the same time that the proposed changes were introduced. Labour Chief Whip Sir Alan Campbell reportedly told a regular meeting of the parliamentary party last night that they should "act as a team" and government efforts at persuasion are expected to continue up until the vote itself, which is due this the current government concessions people who currently receive Pip or the health element of universal credit will continue to do so. But future claimants will still be affected by the reforms. Chris Mason: Labour still has a big persuasion job aheadWelfare cuts: What are the Pip and universal credit changes?'Disability welfare reforms could leave us worse off' The Conservative leader, Kemi Badenoch, told the BBC her party would vote against the measures"The benefits bill is too high," she said."It was 40bn just before Covid. It is now projected to be a 100bn by 2030. And what Labour is doing is not making any savings at all. It's just reducing the rate of increase. That's why we are not supporting it."Other criticism of the government proposals has been diverse, with some saying the reforms will not be as effective as the government hopes. "I strongly believe that these kind of punitive measures of cutting welfare are not going to have the outcomes that we've been told they will," said Olivia Blake, Labour MP for Sheffield Hallam, who is disabled and opposes the reforms."I think it will just be about saving money but will actually move spending into areas such as housing services, the NHS and social care," she told BBC added that some MPs were still considering their vote, saying the rebellion would be "more significant than maybe people realise".Kendall defended the bill in the House of Commons on Monday, saying it aligned with MPs' shared values around providing support to those that could work while protecting those that published by Department for Work and Pensions suggested around 150,000 people might be pushed into poverty by 2030 because of the welfare cuts - lower than the original 250,000 figure estimated before the government made the Stephen Timms is slated to conduct the report that was among the concessions. He told BBC Newsnight that the net effect of the government's policies would reduce poverty - including the measures to help people into work. He also stressed the need to make Pip sustainable in the Conservatives have criticised the cost of the bill while the Liberal Democrats have called for proposals to be suspended so they can be further looked government had hoped to save £5bn a year by 2030 before the concessions. These are now likely to cost around £3bn, according to the Resolution Foundation think tank.
