A defeat Keir Starmer cannot afford
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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Ultimately, there is only one constitutional reason someone is prime minister. They are there because they can command a majority in the House of Commons. No longer do they fall the moment they lose a vote, but once that spell (and power over their own MPs) is broken, they rarely recover.
Less than a year after his landslide victory, Keir Starmer is facing just such a defining moment. If the next few days go badly, we may well look back on this as the last effective week of his authority. The parliamentary revolt against proposed welfare reforms is an existential crisis both for the prime minister and for his government.
This is not the usual tussle over amending legislation, painful enough but commonplace. Instead, around 120 of Starmer’s own MPs — enough to wipe out his majority — are threatening to sink an entire piece of legislation before it has even begun the amendments stages of its passage through parliament. It is one thing to compromise, another to cave in to those wanting to torpedo a vital bill.
This is already a blow. But if he is defeated; if he blinks and pulls the vote on Tuesday or offers more than modest concessions, it will signal a power shift, either marking the government’s transformation into a more leftwing, higher tax-and-spend administration or hobbling it for the rest of Starmer’s term. Prime ministers must listen but reversal would turn his programme into a permanent negotiation with untrusting MPs.
The episode will also raise serious questions about whether Labour is capable of essential reforms that both the public services and finances require.
The primary issue is a plan to reduce payments and tighten eligibility for those claiming health and disability benefits, moves that will eventually cut entitlements for up to 800,000 people. This, plus moves to reduce the financial incentives to seek the health top-up to the UK’s main welfare payment, will save around £5bn a year.
Few dispute the need for reform. Working-age health-related benefits are due to rise from £36bn in 2019 to £63bn by 2028/9. New personal independence payments (Pips) to those under 40 have risen by 150 per cent since the pandemic, mainly due to mental health issues. The rise partly reflects clampdowns on other benefits, driving claimants towards these higher payments. Previous reforms proved to be like shapewear, simply shifting the bulge.
But critics argue that promised employment support will help too few find a job and that the new points-based eligibility rules for Pips are arbitrary and will penalise people with genuine needs. They say, correctly, that it’s all cuts and little reform.
This was always going to be a battle. Labour MPs do not go into politics to cut welfare. Tony Blair also faced large welfare revolts in the early years of his premiership. But crucially, he won them.
And this is also a revolt against Starmer’s dissent-crushing political operation, led by chief of staff Morgan McSweeney who MPs accuse of mishandling the issue. Backbenchers have been treated as wild dogs who need to be regularly tamed. As this rebellion began, the government showed little interest in compromise. Rachel Reeves, the chancellor, has been just as hardline.
Starmer’s retreat over means-testing pensioner fuel payments has emboldened MPs, validating their doubts over his political judgment. They now sense a leader who can be bullied back.
Opposition goes far wider than the usual Corbynite irreconcilables. It is led by senior mainstream Labour MPs and supported by Labour mayors like Sadiq Khan and Andy Burnham. The scale makes MPs less afraid to join. And rebellions are habit-forming.
Belatedly, Downing Street is sounding conciliatory and talking to rebels but it is hard to see them being satisfied without a major retreat on the new Pip rules. This would significantly reduce savings that the Treasury is already spending. And open defiance makes it harder for Starmer to back down.
Ideally, he needs the win or, failing that, a fudge which delays confrontation till later in the parliamentary process when a less humbling compromise can be found. And he has some threats left. Those expecting him to scrap the “two-child cap” limiting benefits for those with larger families are being quietly reminded that defeat here leaves less money for other things they desire.
But it is late in the day and the numbers look very bad. If he blinks or loses, his already reduced credibility will, says one minister, “be shredded”. Soft-left MPs will be emboldened to fight on more issues and press for further tax rises over cuts. Welfare secretary Liz Kendall will be seriously damaged, his chief of staff will be under siege and his chancellor less secure.
Above all, however, the public will rightly question whether Labour has the will to deliver the changes that Britain’s creaking state demands. The scale of the welfare bill means this reform cannot be the last word on the subject. What will happen to contentious NHS reforms? If Labour shows it lacks the stomach for hard choices, voters will resume the search for a party that doesn’t.
Losing or caving in would not be immediately fatal. But whatever the flaws in this legislation — and there are many — it would herald a loss of authority which is often the beginning of the end for leaders. Once you are forced to bend the knee to your backbenchers, you rarely stand tall again.
