On the morning of 23 December 1997, as Tony Blair planned cuts to health and disability benefits, a demonstration that he never forgot began. Protesters in wheelchairs chained themselves to the gates of Downing Street and daubed red paint – spelling “Blair’s blood” – on the street outside. “They elicited much sympathy,” the former prime minister recalled in his 2010 memoir.
Blair’s arguments echoed those made by Starmer today – that the amount spent on welfare is neither fiscally nor morally sustainable (see Will Dunn’s cover story for this week’s NS on the roots of “workless Britain”). “We mustn’t be deflected from carrying out the reforms that are necessary to provide opportunity for people and get the investment into our schools and our hospitals,” Blair declared then.
But this did not prevent the largest revolt of his premiership to date in May 1999 when more than 80 Labour MPs rebelled against plans to means-test incapacity benefit. With remarkable symmetry, that is precisely the number that some estimate may now oppose Starmer.
The Prime Minister enjoys a majority almost as large as his predecessor’s – but No 10 is treading carefully. A green paper on welfare reform originally expected this week has been delayed until next week. Starmer made the case for change to the Parliamentary Labour Party on Monday night – one present describes the mood as an “odd mix of hero worship and pensive anxiety”. MPs have been summoned to Downing Street for slide-heavy briefings led by the Policy Unit.
The government, in other words, has learned from last year’s revolt against winter fuel payment cuts. That policy landed from 10,000 feet – stunning not just backbenchers but Rachel Reeves’ fellow cabinet ministers. This time, the preparatory work that MPs complained was absent last time is being done.
But this does not change the fundamentals of the policy. The government is seeking to make £6bn of welfare cuts, predominantly through changes to Personal Independence Payments (PIP) – a benefit designed to help people with the extra costs of disability, whether they are in work or not. Eligibility will be tightened and some payments may be frozen (so that they do not rise with inflation). Work and Pensions Secretary Liz Kendall, who multiple sources say is unhappy with the scale of proposed cuts, has secured around £1bn for investment in employment support schemes.
There are, broadly speaking, three strands of opinion in the PLP. First, the rebels – they include but are not limited to the Socialist Campaign Group (of 24 Labour MPs). They unconditionally oppose the cuts, regarding them as a breach of the party’s moral principles.
Second, the waverers – they accept the case for welfare reform, but want assurances that those with severe disabilities and illnesses will be protected and that claimants will be supported into work.
Third, the outriders – they are seeking to ensure that ministers do not lose their nerve. David Pinto-Duschinsky, the MP for Hendon and a former special adviser to Alistair Darling (who has the smallest majority in parliament: 15 votes), has formed the Get Britain Working Group, along with 34 of his colleagues. They want to ensure the government makes a moral rather than merely a fiscal case for change. “We believe reforming our broken system is not only necessary, but also a truly progressive endeavour,” they wrote in a letter to Kendall.
The welfare debate will see an argument over Labour’s founding purpose. For some, as cabinet ministers put it, “the clue is in the name” – this is the party of work, not welfare. Others riposte that Labour’s duty is to support those unable to support themselves.
So this is a moral argument but it also, inescapably, remains a fiscal one. It’s not only backbenchers who are pushing Reeves to borrow or tax more. At Tuesday’s cabinet meeting, the Chancellor was challenged by several colleagues to overhaul her fiscal rules (again).
Will Reeves, some in government ask with increasing urgency, really let a crisis go to waste? If the Chancellor’s Spring Statement does not resolve this question, her next Budget will need to.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[See also: Why Britain isn’t working]
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