Already the Government has got into a muddle on this difficult issue. The attempt to remove the winter fuel payment was, frankly, a political debacle. It has cost the Government a great deal of political capital, as was seen at the local elections in May this year.
To recap, the Labour Government announced last summer that they would take away the £300 winter fuel payment from millions of pensioners. They spent 10 months defending the policy on prudent fiscal grounds. They then unceremoniously ditched the plan a few weeks ago.
Reform UK, an amorphous insurgent political party, annihilated the Conservatives and the Government in the local elections in May. They are now comfortably ahead in most opinion polls. They are cynically trying to outflank Labour from the Left on this issue. They have even pledged to reverse the two-child cap on child benefits, a move Labour itself is not committed to.
The cost to the public purse of benefits is, according to the Government’s own sources, set to increase by £18bn in the next four years to reach £70bn a year.
Sir Keir Starmer and Chancellor Rachel Reeves are surely right about this. They know that, without reform, the cost of benefits will rise inexorably. That would lead, as surely as night follows day, to higher taxes which would harm economic growth. Higher taxes to pay for welfare payments would also end up harming the very people Labour claim to support, ordinary hard-working people.
We all know about David Cameron and Theresa May. They had to deal with the European Research Group and other assorted bands of anti-EU zealots. Their time in office was terminated by this conflict.
The rebels will argue that the mere act of reducing benefits will harm the most vulnerable. They will collectively say, “We did not become Labour MPs to reduce welfare payments to the poorest in society”.
square ANDREW FISHER Cutting PIP benefits will be Starmer’s undoing
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Such a retreat would embolden the Left of the parliamentary party. The awkward squad would rebel even more frequently, in the confident expectation that the Government would yield even more ground.
Pushing through reform could increase the split within the Labour Party. Already we can see how the hardcore Left and more pragmatic voices are divided. It could, if badly handled, lead to further alienation of some of Labour’s core support in the country.
Kwasi Kwarteng is a former Conservative MP. He served as chancellor between September and October 2022 under Liz Truss
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