Welfare U-turns show Starmer puts party ahead of country
The Conservatives are the only political party able to say they take the country’s £100bn debt bill and £65bn welfare bill seriously, says Jamila Robertson
We have heard the government assert time and again, that they are taking the difficult decisions. Almost a year on, with inflation up from two per cent to 3.5 per cent, unemployment rising to 4.6 per cent and growth a fantasy, it seems their decisions have proved politically inconvenient and economically fruitless.
Anyone who has knocked on a door in the past year will have been confronted by a depleted electorate resigned to perpetual disappointment by whichever “lot” is in government. This despondency goes some way to explaining the rising appeal of protest parties like Reform, the Lib Dems, Greens and a host of independents. You might think that voters, so royally disappointed, would abandon politics altogether – and whilst many have, (last year’s general election turnout of 59.7 per cent was the lowest since 2001), others are choosing to roll the dice one last time by looking outside the two traditional parties.
The British people want the change they were promised. Yet with polls predicting most of the cabinet will lose their seats to Reform, it looks like Keir Starmer will once again pick party over country.
The Chancellor confirmed this week that Starmer has buckled under political pressure from Angela Rayner within his party and Nigel Farage without and U-tuned on cuts to the Winter Winter Fuel Allowance (WFA) and the two-child benefit cap.
With promises such as £300 savings on energy bills broken, manifesto pledges not to raise National Insurance spun into a matter of semantics and surprises like the removal of WFA and Inheritance Tax on farmers hitting the people who were assured they’d be protected, Labour is looking for a quick win – and it seems it’s welfare.
The ever-growing welfare bill
When it came to power the government was right to try to address the growing welfare bill, which was due to rise from £64.7bn in 2023-24 to £100.7bn in 2029-30. But their reforms which were forecast to cut health-related welfare spending by £5bn in 2029/30, will be obliterated by this week’s policy reversals, which, according to the Resolution Foundation, will cost the taxpayer an extra £5bn a year.
This week, the OECD downgraded UK growth for 2025 and 2026, namechecking “inflationary pressures due to robust wage growth in 2025”. To govern is to choose, and the Chancellor’s decisions at the Autumn Budget have dealt a lasting blow to employment at the very moment we need more people in work and off welfare.
In a speech at the IPPR, shortly after the bruising May elections, work and pensions secretary Liz Kendall said her welfare reforms would be “crucial to fighting the rise in populist politics” and that “no responsible Labour government can resile from taking decisions because they are too difficult.” Yet moments later, Keir Starmer said he would “look at the threshold” of the Winter Fuel Allowance as “part of a fiscal event”, and the Chancellor has now confirmed that this will happen at the Spending Review. It seems the difficult decisions were too difficult after all.
Though politically inconvenient, welfare cuts are crucial – not just to pay down our £2.3trillion debt and debt interest, but as we were told by the PM and defence secretary, John Healey, just this week, we need to be “battle-ready” for a changing world
Reform’s recent jump on the two-child benefit bandwagon means that the Conservatives are the only political party able to say they take the country’s £100bn debt bill and £65bn welfare bill seriously. Though politically inconvenient, welfare cuts are crucial – not just to pay down our £2.3 trillion debt and debt interest, but as we were told by the PM and defence secretary, John Healey, just this week, we need to be “battle-ready” for a changing world.
Disappointingly, both failed to commit to anything more than an “ambition” to get defence spending to three per cent of GDP by 2034. Instead, they pointed to an increase in the defence budget from 2.3 per cent to 2.5 per cent of GDP, but the increase is being funded by cutting the aid budget and will largely be spent on the Chagos Deal (which amounts to giving away the Chagos Islands to Mauritius and leasing them back at a cost of c.£34bn).
With 10 per cent of GDP spent on welfare and 2.8 per cent of GDP spent on health-related benefits alone, it is unfathomable that 0.5 per cent savings cannot be found and redirected to defence. However, it seems this government is more concerned with “fighting the rise in populist politics” than keeping this country safe.
Jamila Robertson is the director of the Centre for the Future of Work