Prime Minister Andy Burnham has committed to bringing the national welfare bill down, but he is fully aware of how high the political stakes are. He witnessed how last year's welfare rebellion marked the beginning of the end for his predecessor in Downing Street. Sir Keir Starmer's authority was shredded when 120—more than a quarter—of his own MPs threatened to derail his reforms.
To defuse the crisis, Sir Keir was compelled to guarantee that existing claimants of Personal Independence Payment (Pip), the main disability benefit in England and Wales, would not lose out. Even then, 49 of the 120 potential Labour rebels still voted against their own government.
Next week, a review by former New Labour cabinet minister Alan Milburn has the capacity to create another internal row in Labour's ranks. Milburn has spent a year grappling with how to reduce the nearly one million young people who are not in employment, education, or training (Neets), as one in eight young people remains out of work or education ahead of the major review. Taking benefit cuts to the Parliamentary Labour Party would usually have a similar effect to adding phosphorous to water.
However, soundings indicate that the deep waters of the Labour ranks are calmer than might be expected. Importantly, two of the most effective organisers of last year's welfare rebellion are now batting for the current prime minister, rather than against the previous one. Louise Haigh is now the most powerful cabinet minister after Andy Burnham himself, while Anneliese Midgeley serves as his chief whip. In addition, the MP who fronted that rebellion, Meg Hillier, has stated that she wants to give Milburn's proposals a "fair wind."
There are also clear differences compared to the previous approach to welfare reform. First, it is not being presented primarily as a cost-cutting exercise with pre-determined savings. Instead, there will be upfront investment to provide more support to unemployed young people, with a timeframe for net savings likely to be set at around a decade—representing gradualism rather than a short, sharp shock.
Second, while last year's initial reforms would have affected people across all age groups, benefit cuts this time will be limited to under-25s, who make up around 11% of Pip claimants, with the Milburn review expected to say that some under-25s should get fewer benefits.
Government ministers who had previously expressed concerns—at least privately—about the changes devised by Rachel Reeves and Liz Kendall are on board this time. One minister explained that so long as there was enough support for young people, including guaranteed jobs and training, MPs would be "fine" with some benefit cuts, while adding that it was vital that those who really could not work would not be worse off.
Milburn will suggest that there could even be enhanced payments for people in this category, while some disabled young people who lose out on Pip could nonetheless receive an additional "allowance" to help with living costs.
Another minister who opposed the previous reforms praised the process this time. There has been a high level of engagement not only from Milburn, but also from Work and Pensions Secretary Pat McFadden, who has been taking MPs through the principles behind the reforms. Meanwhile, one minister was a little more cautious, suggesting support for a reduction in benefits would depend on what the entire "package" of reforms looked like.
Some of the eventual 49 rebels from last year find themselves in a similar place. York MP Rachael Maskell emphasized that it was essential she saw the detail of the proposals rather than a "drip, drip" of press reports that would "cause young people stress and distress." She felt withdrawing Pip from young people was "like a sledgehammer to crack a nut" and voiced concern that some disabled people required Pip to remain in work, suggesting the government "shouldn't just point the finger at young people" and should instead examine closely how employers could take on more youngsters.
Stroud MP Simon Opher, who also voted against the government last year, acknowledged there was a "crisis" with so many Neets and said Milburn had come up with a "credible solution." However, he believes cutting benefits should be a "last resort" and expressed worry about restricting access to the health element of Universal Credit, noting that a quarter of young claimants are not Neet. He concluded that "the devil will be in the detail."
Timing is also central to how the package will be received. For some sceptics, including serving ministers, the Milburn proposals will be welcomed more warmly if support for young people is put in place before entitlements are withdrawn.
For some Labour MPs, however, cutting payments to existing claimants crosses a line. Clapham and Brixton Hill MP Bell Ribeiro-Addy stated she was not sure she could back cuts. Referring to Pip, she didn't believe that "you get a disabled young person into work by taking away the money that helps them to get into work." Another MP on the left of the party, Brian Leishman, stated he could not back benefit cuts because "we are in the middle of a cost of living crisis."
As a result, a welfare rebellion seems guaranteed if Burnham accepts Milburn's recommendations. Nevertheless, it seems unlikely to reach the same scale or carry a similar level of political jeopardy as the rebellion that shook the Starmer government.
