LONDON — Keir Starmer is taking a significant gamble by implementing substantial cuts to the U.K.’s welfare system, banking on the hope that these changes will not alienate his party members or deter voters. The government’s ambitious plan was officially unveiled on Tuesday, aiming to streamline the social security framework and achieve annual savings of £5 billion by 2030.
The proposed reforms include contentious measures that would tighten the eligibility criteria for disability support and reduce certain health-related benefits. These changes have sparked considerable unease among some Labour MPs, who feel that this shift is not aligned with the party’s original mandate.
“I will not stand by while millions of people become trapped out of work and abandoned by the system,” Starmer stated, defending what he characterized as “the biggest changes to the welfare system in a generation.”
The backdrop to these reforms is an increasingly troubling economic landscape for the U.K., as Chancellor Rachel Reeves prepares to announce strategies for fiscal balance in her upcoming spring statement next week. Starmer’s welfare promises now face the scrutiny of reality.
Contentious reforms aimed at boosting employment
At the core of the proposed changes is a tightening of health-related benefits, designed to facilitate the transition of more individuals currently receiving disability and incapacity benefits into the workforce through a combination of incentives and requirements. Under the new plan, the “work capability assessment,” which is currently used to qualify for health and disability top-ups under the Universal Credit system, will be eliminated by 2028/29. Instead, eligibility will be determined based on the assessment criteria for a separate disability benefit, the Personal Independence Payment (PIP).
Additionally, health and disability top-ups will be frozen until 2030, and will be cut by half for new claimants starting in April next year. Ministers are also considering measures that would prevent individuals under 22 from receiving these top-ups altogether.
While the Universal Credit standard allowance will increase from £91 per week in 2024/25 to £98 per week in 2026/27, qualifying for PIP will become more stringent, raising concerns that some individuals will face dual losses—being ineligible for PIP and consequently missing out on Universal Credit top-ups. An impact assessment detailing the number of individuals affected is anticipated next week, leaving Labour MPs uncertain about the ramifications of these reforms.
Mixed reactions from Labour MPs
The government’s announcement initially provoked anxiety among Labour MPs, but confirmation that a previously speculated freeze on daily living payments would not be included in the reforms helped assuage some of their concerns. A Labour MP remarked that they believed “Liz has done well” during her presentation, adding, “People came out of the chamber happier than they were going in.”
Notably, veteran Labour MP Stephen Timms, who has been a longstanding advocate for the welfare system, supported the proposals during the announcement. His endorsement is seen as crucial among skeptical lawmakers. Another Labour MP commented, “I trust him with this.”
However, dissenting voices within the party remain vocal. Clive Lewis, a Labour MP, expressed that his constituents were “very angry” about the impending changes, stating that this is not the direction a Labour government should take. Scottish Labour MP Brian Leishman underscored the moral implications of reducing welfare by £5 billion, emphasizing that such actions are inconsistent with the party’s principles.
Compounding the situation, Debbie Abrahams, chair of the work and pensions committee, highlighted that there are more compassionate alternatives to achieving fiscal balance without burdening sick and disabled individuals. The support of influential committee chairs is critical for any challenges to the proposed reforms.
As Starmer’s administration navigates this treacherous terrain, there are concerns about the potential backlash from the party and the electorate. Even within his inner circle, there is an acknowledgment of the challenges ahead. Ongoing briefings and discussions with MPs are taking place to mitigate dissent and solidify support.
The coming days are likely to be pivotal as more details emerge and public reactions shape the discourse around these reforms. As Labour MPs continue to evaluate the implications, the government’s approach to welfare reform will remain under close observation.