It takes something for a prime minister with a majority of 156 to contrive a parliamentary defeat. But that was Sir Keir Starmer’s singular achievement this week. Or it would have been, had he not performed a giant policy U-turn to avoid it. His reversal avoids the humiliation of having well over one hundred Labour MPs voting against their own government. But the episode leaves Starmer’s authority and public approval in tatters.
The issue is welfare spending. Since its landslide election victory a year ago, the Labour administration has been in a fiscal bind. It inherited a mess from the previous Conservative government: a £22 billion shortfall in the in-year public accounts, taxes at an all-time high, government debt at nearly 100 per cent of GDP and borrowing at the limits of market tolerance. A huge tax-raising budget last November, the largest in modern times, looked to have relieved the problem. But in the first few months of this year weak growth and the prospect of Trumpian tariffs blew apart Labour’s plans, and chancellor of the exchequer Rachel Reeves was forced to find more money to fill the fiscal hole.
Ask any Treasury to find £5 billion this year and every year — with “raise taxes again” and “borrow some more” not judged to be acceptable answers — and just one response will be forthcoming. Only welfare spending offers up such sums for immediate cuts. This is partly because welfare spending is assumed to be generally unpopular with the public. And it’s also because — unlike cutting expenditure on, say, education, health or policing — it doesn’t lead to unionised public servants losing their jobs. It simply makes welfare recipients poorer. And how much power do they have?
More than Starmer and Reeves bargained for, it turns out. Labour’s plans were singularly harsh. To find their £5 billion, they decided to reduce eligibility for disability benefits. Under the current system, disability is assessed on a range of criteria — such as how much assistance a person needs to perform everyday tasks including washing and shopping — and claimants qualify for benefits according to how practically disabled they are. The government proposed to tighten the criteria so that, for example, someone unable to wash themselves below the waist would no longer qualify unless they were also severely disabled in some other way. It also planned to reduce the rate of the incapacity benefit paid to people deemed unable to work for health reasons, and to cut support for their carers. Between 800,000 and 1.2 million people would have lost support of between £4200 and £6300 a year by 2029–30.
The government claimed it was reforming an “unsustainable” welfare system. The overall cost of the benefits paid to working-age people (that is, not including pensions and child-related payments) is projected to rise by more than half in the next five years, from just under £50 billion in 2024 to more than £75 billion by 2030. That would take the benefits bill from 1.7 per cent of GDP to 2.2 per cent, around the size of current spending on defence. Any government, Labour said, would have had to make cuts.
The rising welfare bill mainly reflects a dramatic increase in the number of people of working age who are not working or looking for work. More than a fifth of working-age adults in the UK — 9.2 million people — are now deemed to be “economically inactive.” This is 700,000 more than before the Covid pandemic. The reasons are complex and not fully understood: it is partly to do with older workers taking early retirement, partly to an increase in long-term sickness and disability, and partly down to a rise in the number of “NEETs”: young people not in education, employment or training. The government has set out various plans to tackle these problems.
But the disability benefit cuts were not among them. As disability rights groups quickly pointed out, eligibility for those benefits has nothing to do with fitness for work. Cutting them would not incentivise people to look for employment; on the contrary, it is often only the financial help they receive — for example, for mobility — that enables a disabled person to hold down a job. The government’s proposed changes were not “reforming the system.” They were simply saving money. And doing so on the backs of some of the poorest and most vulnerable people in society.
For many Labour MPs this was simply unconscionable. They did not enter politics to do this. The government announced its proposals in March; by last week more than 120 Labour MPs had signed a parliamentary motion that would have killed the legislation. One frontbencher had already resigned and several more were threatening to. Starmer claimed that MPs’ criticisms were just the usual “noises off,” and blithely insisted that the plans would go ahead. And then suddenly on Thursday night he caved in. The benefit cuts would be abandoned for current recipients. New claimants would be paid less, but only after full consultation with disabled people’s organisations.
And how would this be paid for, given the centrality of the planned cuts to the government’s fiscal sums? It could not say. We shall have to wait till the budget next October to find out. But with the savings now estimated as only £2 billion a year, not £5 billion, it looks fairly certain that either or both of the two previously unacceptable answers — higher taxes or more borrowing — will need to be deployed.
Major U-turns are never a good look for a government’s reputation for competence. But this is Starmer’s third in as many months. He had already reversed Reeves’s highly unpopular abolition of the pensioners’ winter fuel payment for all but the poorest. And he had gone back on a decision not to order a public enquiry into the sexual abuse of vulnerable girls by gangs of men in some of Britain’s poorest towns. Such an inquiry was not necessary, he had previously said, as other inquiries had already been held; but there will now be one.
Even before this latest U-turn, Starmer’s approval rating had fallen to minus 46. In the most recent surveys of voting intentions, Labour is down to around 23 per cent, from the 34 per cent it won in last year’s election. Top of the polls, on around 27 per cent, is Reform UK, the right-wing populist party headed by veteran Brexiteer Nigel Farage. It is of little consolation to Labour that the Conservative Party is doing even worse, barely reaching 17 per cent.
What has gone wrong for Starmer? Labour MPs are offering three explanations, none of them giving much comfort to the beleaguered PM.
The first is that he and his advisers have become too obsessed with countering the threat from Reform. The new party is gathering most of its support from former Tory voters. But a proportion are switching from Labour, particularly in the party’s former industrial and working-class heartlands. These voters, it is believed, are anti-immigrant, anti-woke and anti-welfare. So Labour should be too.
Starmer’s Labour critics think this analysis is misguided. The Labour-to-Reform switchers may be cultural conservatives who don’t like immigration, but they mostly remain quite left-wing on economic issues. And quite a few of them have family members who are disabled or long-term sick, who care for them, or are otherwise dependent on the welfare system. These voters didn’t support the benefit cuts. And neither did those who are abandoning Labour to its left — to the Liberal Democrats and Greens — rather than its right. Labour MPs warn that focusing entirely on attracting potential Reform voters is making Labour deeply unattractive to a much larger cohort of voters in its new heartlands in metropolitan and middle-class areas.
The second criticism made of Starmer cuts even deeper. His MPs are asking what he actually believes in. This is not just because of the U-turns. It is because Starmer seems to find it very difficult to articulate it himself. A dull public speaker, the prime minister has failed to craft a consistent or compelling message about what his government is for. It has some distinctive policies — a higher minimum wage and more secure employment rights, an industrial strategy, an effort to build more affordable homes, a commitment to net zero. But Starmer offers no vision or philosophy that unites these policies, and no soundbites or slogans that imprint them on voters’ consciousness.
And then there’s the third criticism. This is the one you hear most insistently from his despairing MPs. Starmer is just not very good at politics. An MP only since 2015, with the training and instincts of the lawyer and civil servant he once was, Starmer simply doesn’t know how to listen to voters, how to keep his own MPs on board, or how to craft a communications strategy. The disability benefits fiasco demonstrated all these failings. His supporters worry that it wasn’t a bug in the way his government works, but a feature. •
