Latest news with #welfareReform
Bloomberg
3 hours ago
- Politics
- Bloomberg
Labour's ‘Starmtroopers' Mount Rebellion Against Their Leader
Keir Starmer's landslide UK general election win last July delivered to the House of Commons what was supposed to be a hand-picked army of loyalists molded in his image, a cadre that earned the moniker 'Starmtroopers.' As the prime minister's first anniversary in power approaches next week, the troops have mutinied, and some now have him and his chancellor in their sights. Backbench Labour Members of Parliament on Thursday forced the government into a humiliating U-turn on its flagship welfare reform policy, canceling some £3 billion ($4 billion) of planned disability benefit cuts which had enraged the left-leaning party's ranks. Downing Street had little choice but surrender: without concessions, Starmer faced the prospect of a parliamentary defeat Tuesday that would have been extraordinary for a government with a 165-seat majority, calling his premiership into question.
Daily Mail
8 hours ago
- Politics
- Daily Mail
Keir Starmer's authority has vanished. What's the point of this Government? When the time comes the British people will kick him into orbit: Read BORIS JOHNSON's devastating verdict a year on from Labour's loveless landslide
So that's it. Pffft! With a long sibilant farting efflatus as if from a punctured balloon the last of Keir Starmer 's authority has vanished to the four winds. He can't control his backbenchers. He can't deliver on his election promises. His flagship welfare reform Bill – once hailed as the superdreadnought of the Labour fleet – has run up the white flag at the first whiff of gunfire and vanished back to port.
BBC News
9 hours ago
- Business
- BBC News
Benefits U-turn raises questions about Labour's long-term plan
About a quarter of the working age population - those aged 16 to 64 - do not currently have a job. Caring responsibilities and ill health are the most common reasons given by those who would like a four-year mandate and a towering majority, Labour might have been expected to have invested in a long-term plan to help those who are sick get back into the workforce, at least part-time. It may have cost up front, but in the future it could have delivered big its determination to avoid a repeat of the Liz Truss mini-budget led them to target big savings quickly - but it ended up causing perhaps even more trouble, with the government performing a spectacular U-turn to avoid a mass Labour raises significant questions, not just about how this year-old government manages its affairs day to day, but if its overall strategy to renew the country is on track. Long-term reform vs short-term savings The government was adamant that its "welfare reform" changes - announced in March's Green Paper - were designed to get people back to bulk of planned savings came from tightening the eligibility for Personal Independence Payments (Pip), which are paid to support people who face extra costs due to disability, regardless of whether or not they are in work. Independent experts questioned whether more of the savings should have been redeployed to help people with ill health ease back in to the workforce, for example part time. That could mean support such as potential employer subsidies - especially to help get younger people into work and pay taxes, rather than claim benefits long term. It could also help fill jobs - a win win for rebels argued that the upfront cuts were aimed at filling a Budget hole against the Chancellor's self imposed borrowing rules. Their central criticism was that this was an emergency cost-cutting is true that the Chancellor's Budget numbers were blown off course by higher borrowing costs, such as those emanating from US President Donald Trump's shock tariffs, so she bridged the borrowing gap with these cuts. The welfare reform plan to save £5bn a year by 2029-30 helped Chancellor Rachel Reeves meet her "non negotiable" borrowing rules. Indeed when the Office for Budget Responsibility (OBR), which monitors the spending plans, said they would not in fact raise enough money, Reeves announced more welfare cuts on the day of the Spring main point was to raise money to help close the gap in the Budget tell me that the welfare reform plan was in fact brought forward for this purpose. But this was still not a full programme of welfare reform designed to deal with a structural issue of rising health-related claims. 'Top slicing never works' The former Conservative Welfare Secretary Iain Duncan Smith resigned as work and pensions secretary almost ten years ago, saying a similar plan to cut disability benefits was "indefensible".He says the cuts should have formed part of "a wider process" of finding the best way to focus resources on those most in need."Top slicing never works," he says of plans to extract savings from the welfare budget without its heart the problem is perceived to be that the current welfare structure has become overly binary, failing to accommodate a growing demographic who should be able to do at least a bit of work. This rigidity - what ministers refer to as a "hard boundary" - inadvertently pushes individuals towards declaring complete unfitness for work, and can lead to total dependence on welfare, particularly universal credit health (UC Health), rather than facilitating a gradual transition back into some leading experts this is, in fact, the biggest cause of the increase in health-related welfare claims. The pandemic may have accelerated the trend, but it started a decade proportion of working age people claiming incapacity benefit had fallen well below 5% in 2015, now it's 7%.The pandemic period exacerbated the rise as ill health rose and many claims were agreed without face-to-face meetings. These claims were also increasingly related to mental ill health. One former minister, who did not wanted to be named, said the system had effectively broken down."The real trouble is people are learning to game the Pip questionnaire with help from internet sites," he says. "It's pretty straightforward to answer the questions in a way that gets the points."As he puts it, the UK is "at the extreme of paying people for being disabled" with people getting money rather than equipment such as wheelchairs as occurs in other most kinds of mental ill health, in kind support, such as therapies, would make more sense than cash transfers, he some disability campaigners have said that being offered vouchers instead of cash payments and thereby removing people's automony over spending, is "an insult" and "dangerous". These pressures can be seen in the nature of the compromise planned cuts to Pip payments will now only apply to new claimants from November next year, sparing 370,000 current claimants out of the 800,000 expected to be affected by the Meg Hillier, Labour MP and chair of the Commons Treasury committee, along with other rebels, have also pointed out that the application of the new four-point threshold for Pip payments will be designed together with disability is a fair assumption that this so called "co-production" may enable more future claimants to retain this universal credit, the government had planned to freeze the higher rate for existing health-related claimants but the payments will now rise in line with inflation. And for future claimants of universal credit, the most severe cases will be spared from a planned halving of the payments, worth an average of £3,000 per these calculations don't take into account the effects of £1bn the government has pulled forward to spend to help those with disabilities and long-term health conditions find work as swiftly as possible. This originally wasn't due to come in until 2029. This change does help Labour's argument that the changes are about reform rather than cost cutting. But this is still not fully fledged radical reform on the scale that is needed to tackle a social, fiscal and economic crisis. The OBR has not yet done the Keep Britain Working review, led by former John Lewis boss Sir Charlie Mayfield, which was commissioned by the government to look into the role of employers in health and disability, has not yet been the Netherlands, where a similar challenge was tackled two decades ago, their system makes employers responsible for the costs of helping people back into work for the first two businesses are concerned about the costs of tax, wages and employment rights policies. And there is already a fundamental question about whether the jobs are out there to support sick workers back into the workforce. Tax rises or other spending cuts The Institute for Fiscal Studies and Resolution Foundation think tanks have estimated the government's U-turn could cost £3bn, meaning Chancellor Rachel Reeves will either have to increase taxes in the autumn budget or cut spending elsewhere if she is to meet her self-imposed spending the income tax threshold freeze again, seems a plausible plan There are still a few months to go, so the Treasury might hope that growth is sustained and that borrowing costs settle, helping with the OBR numbers. It will not be lost on anyone that the precise cause of all this, however, was a hasty effort to try to bridge this same Budget rule maths gap that emerged in questions arise about just how stability and credibility-enhancing it really is to tweak fiscal plans every six months to hit Budget targets that change due to market conditions, with changes that cannot be ultimately idea floated by the International Monetary Fund that these Budget adjustments are only really needed once a year must seem quite attractive today. Is Britain getting sicker? And then there are bigger questions left Britain really fundamentally sicker than it was a decade ago, and if it is, does society want to continue current levels of support? If the best medicine really is work, as some suggest, then can employers cope, and will there be enough jobs?Or was it the system itself - previous welfare cuts - that caused the ramp up in claims in recent years, requiring a more thought-through type of reform? Should support for disability designed to help with the specific costs of physical challenges be required at similar levels by those with depression or anxiety?Dare this government make further changes to welfare? And, in pursuing narrow Budget credibility, has it lost more political credibility without actually being able to pass its plans into law?The government is not just boxed in. It seems to have created one of those magician's tricks where they handcuff themselves behind their backs in a locked box - only they lack the escape skills of a Houdini or will be relief that the markets are calm for now, with sterling and stock markets at multi-year highs. But an effort to close a Budget gap, has ended up with perhaps even more fundamental questions about how and if the government can get things done. BBC InDepth is the home on the website and app for the best analysis, with fresh perspectives that challenge assumptions and deep reporting on the biggest issues of the day. And we showcase thought-provoking content from across BBC Sounds and iPlayer too. You can send us your feedback on the InDepth section by clicking on the button below.
The Guardian
15 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.'
The Independent
18 hours ago
- Business
- The Independent
Welfare reforms strike ‘right balance' after U-turn, says Starmer
Sir Keir Starmer has said his welfare reforms now strike 'the right balance' after he U-turned in the face of a major backbench rebellion. Speaking for the first time after Downing Street agreed a series of concessions on its welfare policy, the Prime Minister said the climbdown followed a 'constructive discussion' with Labour rebels. He told broadcasters on Friday: 'The most important thing is that we can make the reform we need. '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. 'For me, getting that package adjusted in that way is the right thing to do, it means it's the right balance, it's common sense that we can now get on with it.' Earlier, Work and Pensions Secretary Liz Kendall said the party was in 'a good place' on welfare reform, after offering concessions to rebels late on Thursday. Some 126 Labour MPs had signed an amendment that would halt the Universal Credit and Personal Independence Payment Bill in its tracks when it faces its first Commons hurdle on Tuesday. Leading rebels now believe the concessions on offer, which include protecting personal independence payments (Pip) for all existing claimants, will be enough to win over a majority. However, the fallout threatens to cause lasting damage, as harder line rebels remain opposed to the legislation and some backbenchers have called for a reset of relations between Number 10 and the parliamentary party. But the reversal means Chancellor Rachel Reeves now faces a scramble to fill a potential hole in her budget this autumn, with the cuts now likely to save much less than the £4.8 billion the Government had expected. Economists at the Institute for Fiscal Studies and the Resolution Foundation have both suggested the changes could reduce that figure by up to £3 billion. But Downing Street has so far declined to set out its own figures for how much it now expects to save, or to say how the shortfall will be covered beyond insisting there would be no 'permanent' increase in borrowing and refusing to rule out tax rises. Facing questions about the climbdown on Friday, Ms Kendall denied suggestions she had found it 'difficult' to water down reforms she had so strenuously defended and said the concessions left the Bill in 'the right place'. 'We have listened to people, we have engaged with them,' she said. 'I think we're in a good place now, alongside the huge investments we are putting in to create the jobs that people need in every part of the country… but also to make sure there's employment support for those who can work and protections for those who can't.' The Government has also left the door open to further reform down the line, with Ms Kendall saying there need to be 'changes in the future' to ensure 'people who can work do'. The Government's original package had restricted eligibility for Pip, the main disability payment in England, as well as cutting the health-related element of universal credit. Existing recipients were to be given a 13-week phase-out period of financial support in an earlier move that was seen as a bid to head off opposition. Now, the changes to Pip will be implemented in November 2026 and apply to new claimants only while all existing recipients of the health element of universal credit will have their incomes protected in real terms. The concessions on Pip alone protect some 370,000 people currently receiving the allowance who were set to lose out following reassessment. The changes represent a major climbdown for the Prime Minister, just days after he insisted to reporters he would 'press on' with the cuts, arguing there was a 'moral case' for them. Dame Meg Hillier, one of the leading rebel voices, hailed the concessions as 'a good deal' involving 'massive changes' to protect vulnerable people and involve disabled people in the design of future reforms. She said: 'It's encouraging that we have reached what I believe is a workable compromise that will protect disabled people and support people back into work while ensuring the welfare system can be meaningfully reformed.' But not all the rebels have been satisfied with the changes, with several suggesting they would create a 'two-tier system' and raising questions about who would be classified as a new claimant after November 2026. One told the PA news agency that discontent and low morale among the backbenches would 'continue to fester' without a 'wider reset' of relations between Number 10 and the Parliamentary Labour Party. Another accused decision-makers in Government of operating as an 'exclusive club' and showing 'disregard' for both its MPs and experts outside Westminster, while some claimed Dame Meg had failed to include other backbenchers in her negotiations. Conservative leader Kemi Badenoch criticised the U-turn, saying the Government's failure to make 'minor savings' on welfare showed they were unable to deal with major issues. Liberal Democrat work and pensions spokesman Steve Darling said his party would continue opposing the Bill, saying the proposed cuts would still 'cause immense damage to some of the most vulnerable'. There was mixed reaction among charities to the prospect of concessions. Learning disability charity Mencap said the news would be a 'huge relief to thousands of people living in fear of what the future holds'. But the MS Society urged rebels to hold firm and block the Bill, insisting any Government offer to water down the reforms would amount to 'kicking the can down the road and delaying an inevitable disaster'.
