Voters will punish Labour if rhetoric on welfare doesn’t match reality
Much like the previous Tory administration, this Labour government’s political downfall risks being driven by a vast gap between its promises and actual delivery, says Matthew Lesh
The government has announced reforms aimed at getting the rising number of post-Covid jobless into the workforce and reducing the welfare bill. The Prime Minister presents the initiative as a “moral mission” to ensure that everyone has the opportunity to work. However, activist groups argue that the changes disproportionately harm the most vulnerable.
This may sound like a description of the Labour government’s announcements this week. But it is not. The Prime Minister in question was Rishi Sunak, who delivered his own speech on welfare reform less than a year ago. Yet, ultimately, the soaring rhetoric came to little. The welfare problem was not solved.
Much like the previous Tory administration, this government’s political downfall risks being driven by a vast gap between its promises and actual delivery.
The government rapidly lost their political capital with the public last year and increasingly finds its backbenches frustrated with its agenda. That will ultimately not matter if it actually delivers. That is, if people feel better off, and the government is awarded a boost in polling and re-election, then grumbles and short-term unpopularity means nothing. It will have all been worth it. On the other hand, if there is little to show in the end for all the hard-nosed activity, they will be punished.
Unfortunately, for the government and the country, we currently appear to be on the latter path.
This week’s welfare reforms are a case in point. There are sensible elements, like a ‘right-to-try’ work without losing benefits and an effort to reduce the ballooning welfare budget.
Are welfare cuts really that radical?
But in the scheme of things, they are hardly as radical as the government’s rhetoric claims. The measures are expected to save £5bn over five years, so just £1bn of the current £300bn annual welfare budget. It’s entirely unclear how many more people will end up in the workforce due to the changes. Perhaps helpful at the margins but hardly proportionate to the scale of the troubles. If this is all the government does, it’s likely that little will have changed by the time of the next election.
More than anything else, Britain is held back by a lack of housing, electricity costs and poor infrastructure. This results from a planning system that makes it crushingly expensive and slow to get projects off the ground. The government has entirely accepted this is a major problem and Keir Starmer has promised to “put builders not blockers first”. However, and putting aside that even major reform of this system will take time and many years to bear fruit, the current set of policies nowhere near match the rhetoric.
Just take one example. One of the biggest obstacles to major projects, and a big driver of rising costs, is nature protection requirements. Prime examples include HS2’s £121m expenditure on a tunnel for bats and a ‘fish disco’ for the Hinckley Point C nuclear power plant.
The Planning and Infrastructure Bill, announced a few weeks ago, aims to tackle longstanding barriers to development. However, as Sam Dumitriu from Britain Remade has highlighted, the proposed reforms may not go far enough.
While the bill shifts from a project-by-project approach to a strategic system – potentially streamlining approvals and cutting costs – it still requires developers to provide sufficient compensation plans for environmental impact. In practice, this could preserve existing delays, as Natural England can still drag their feet on whether proposed alternatives are adequate. Hardly a better outcome.
Beyond planning reform, it’s a similar story on the NHS. Last week, the government ‘abolished’ NHS England. This radical-sounding move amounts to moving responsibility for managing the system from an arms-length body to direct ministerial oversight in the department. This is not a terrible idea for the sake of accountability and costs, but it’s difficult to see how it changes the underlying dynamics that drive poor healthcare outcomes.
The devil, as they say, is always in the detail. And so far, at least, it is not stacking up.
Matthew Lesh is country manager at Freshwater Strategy and a Public Policy Fellow at the Institute of Economic Affairs