03.07.2025

Another fine mess

One year in and the Labour government is unpopular, divided and looking incompetent. Strange, given the huge majority and the careful selection process. Ian Spencer wonders who will get the blame

Sir Keir Starmer has performed yet another humiliating climbdown - this time, of course, following the threat by more than 120 Labour backbenchers to vote against the government. He still only managed to get his thoroughly gutted welfare bill through the House of Commons with a 75 majority. Most of the rebels see no chance of promotion, fear that their precious careers will come to a sad end at the next election - that and they simply consider the legislation callous.

After all, the department of work and pensions’ own impact assessment of the proposed welfare cuts was that it would push a further 250,000, including 50,000 children, into relative poverty. Moreover, 3.2 million were set to lose on average £1,720 per year by 2029-30.¹

With back-tracking on welfare, winter fuel payments, grooming gangs and even the ‘Island of strangers’ speech, the Labour government is starting to look incompetent, as well as cruel.

The original welfare bill included proposals to restrict eligibility for personal independence payments (PIP) and cut the health-related element of universal credit (UC health). The changes to PIP would have led to 800,000 people losing an average of £4,500 a year, while those affecting UC health meant that 2.3 million people would lose an average of £500 per year (730,000 would lose £3,000 per year).

Impact assessment

The Health Foundation, in its impact assessment of the proposed reforms, pointed out that mental and physical health are likely to worsen as a direct result. About 85% of all disability- and health-related recipients report having a mental health condition and about 30% have musculoskeletal disease. Under the proposed reforms three quarters of people receiving the daily living component of PIP, with arthritis, back or chronic pain, and almost half of those with anxiety and depression, were at risk of losing their PIP. Given that about 20% of PIP recipients are in work, this would certainly have made it harder for people to manage their ability to engage with work and participate in society - a critical determinant of wellbeing.²

Work and pensions secretary Liz Kendall said that the changes would “help people stay in work” and “get back to work more quickly”.³ I suppose the assumption is that hunger and being worried sick about how to pay bills is a powerful incentive to take any job. However, the most likely outcome is missed meals, reliance on food banks and, for some, an early death.

For example, a recent study by the London School of Economics has shown that austerity measures by the UK government after 2010 had a significant impact on mortality and life expectancy.⁴ The authors estimate that cuts in health expenditure and welfare reduced life expectancy by two to five months, which led to a three-year setback in life expectancy progress between 2010 and 2019. “This is the equivalent to about 190,000 excess deaths, or three percent of all deaths.” The authors go on to conclude that the “costs of austerity significantly exceeded the benefits derived from reduced public expenditure.”

The welfare retreat means that most of those currently receiving PIP will continue to receive it, but the austerity measure will apply to new claimants, creating a two-tier system. Similarly, the government also reversed its plans to freeze UC health, and the payments will now rise in line with inflation for existing recipients. Because of the U-turn, only a mere 150,000 will be pushed into relative poverty.⁵ Moreover, the ‘savings’ will now only be £2 billion a year rather than the £5 billion originally projected.

Personal independence payments were introduced by the Welfare Reform Act 2012 and the Social Security (Personal Independence Payment) Regulations 2013 to replace the disability living allowance. DLA was done away with, because the then Tory government felt that the poor were finding it too easy to claim, and not least because doctors, with an eye on the health and wellbeing of the chronically sick, understood that alleviating poverty might prove helpful. Instead of doctors making the decision as to who gets the benefit, a PIP assessor (usually some other health professional, such as a nurse) makes the decision, using a pre-set algorithm and very little discretion.

One of the consequences of the transition from DLA to PIP was a rise in drug-related mortality, which has increased substantially since 2012. A study published in Social Science and Medicine showed that “each £100 per capita budget reduction was associated with an increase in drug-related death rates of 3.30 per 100,000 population”.⁶

The then work and pensions secretary, Iain Duncan Smith, famously had his expenses credit card suspended because of the amount he had racked up at taxpayers’ expense, while advocating cutting benefits to the poorest in society. At the time, another MP who had her expenses credit card frozen was his then shadow counterpart - one Rachel Reeves, the now increasingly unpopular chancellor of the exchequer.⁷

The shambolic turnaround suggests they had learned nothing from attempts to cut pensioners’ winter fuel allowance, which was introduced as a universal benefit by Labour chancellor Gordon Brown in 1997. In July 2024 Reeves announced that it would only be given to those in receipt of pension credit or other means-tested benefits. The aim was to save £1.4 billion, reducing the cost of the scheme to £0.5 billion. However, after the climbdown the savings dropped to £450 million. A further consequence was that more pensioners claimed pension credit and a further 100,000 were awarded. Given that each annual pension credit claim costs around £3,900 a year, the total cost of these new claims could be around £234 million. That additional cost would offset around half of the £450 million savings claimed by the government for its latest changes to winter fuel eligibility. In practice, pensioners with an income of over £35,000 now have the benefit clawed back by HM Revenue and Customs.⁸ Rachel Reeves has made a point of saying that she would live or die by balancing the books.⁹ I wonder which it will be? No wonder the poor woman is shedding tears.

Of course, other U-turns are available - such as Keir Starmer’s decision to hold a national inquiry into grooming gangs, after accusing those calling for one of jumping on a far-right bandwagon. He commissioned Dame Louise Casey to write a report to “double-check” the issue. “That, to me, is a practical, common-sense way of doing politics,” he told the BBC’s political editor, Chris Mason.¹⁰

Absurdity

How did Starmer and Reeves end up in this mess in the first place? Thanks to the absurdity of the British first-past-the-post electoral system, in the general election of July 4 2024, Labour ended up with two-thirds of the seats based on a third of the votes (34%)! It had a majority of 174 and wasted no time imposing discipline on the ‘class of 24’ - in particular, the rump of what passes for a left wing. Seven MPs were suspended from the parliamentary Labour Party for refusing to support a Tory-inspired two-child benefit cap.

The Labour leadership seems remote from (if not contemptuous of) its backbenchers and was taken by surprise by the scale of this latest rebellion. Attempts by MPs to talk to Starmer or Reeves were fobbed off with presentations and charts from officials showing the growing size of the welfare budget and the increasing numbers of people on PIP.¹¹

Labour came to office in the aftermath of the mini-budget by Liz Truss, delivered by hapless Conservative chancellor Kwasi Kwarteng in September 2022. Seizing on the reaction of the City of London as a rationale for their mantra of ‘balancing the books’, Reeves and Starmer decided on a strategy of blaming everything on the ‘fiscal black hole’ left by the last Tory administration, to impose austerity on the poor (and largesse on the arms industry - the government committed itself to spending five percent of gross domestic product on defence by 2035).

However, by the time of the 2025 local council elections on May 1, with no sense of irony, Reform UK took 677 council seats, while Labour only managed 98 - down by 187. Labour also lost the Runcorn and Helsby parliamentary by-election to Reform. Nigel Farage’s party seemed to be the big threat to the intake of hand-picked Labour candidates - their opportunism outshone only by their sense of self-preservation.

Starmer quickly adapted to the perceived threat. On May 12, he gave a press conference, in which he promised a significant fall in net immigration by the end of the parliament and talked about the “incalculable damage” done to society by immigration. He even stated that “we risk becoming an island of strangers”, drawing on the infamous ‘rivers of blood’ speech by Enoch Powell in 1968, when he talked of white people becoming “strangers in their own country”.

By June 27, Starmer said that he “wouldn’t have used those words if I had known they were or even would be interpreted as an echo of Powell. I had no idea - and my speech writers didn’t know either.” Were they ignorant or incompetent? Starmer didn’t say, although he added: “But that particular phrase - no, it wasn’t right. I’ll give you the honest truth: I deeply regret using it.”¹²

But there is more, not least of which is the sinister figure of Morgan McSweeney. In an echo of Dominic Cummins, Boris Johnson’s diptych, McSweeney and Starmer seem to be joined at the hip. McSweeney is Starmer’s chief of staff at Number 10 and credited by many commentators as being the architect of the shift to the right in the Labour Party after Jeremy Corbyn’s defeat.

McSweeney was instrumental in managing the constant briefing of journalists around accusations of anti-Semitism in the Labour Party and is known for his visceral hatred of the left. He is said to be incensed by the stories of ‘grooming gangs’, replete as they are with racist overtones.¹³ It does not seem too much of a stretch to imagine that he played a part in Starmer’s acceptance of the political expediency of having an enquiry into grooming gangs to head off Reform UK in the aftermath of Labour’s drubbing at the local council elections.

The question is whether McSweeney was also responsible for the Enoch Powell allusions in Starmer’s speech and whether Starmer was ‘taking one for the team’, when he claimed ignorance of the significance of his use of Powellite language. McSweeney, who spent some of his formative years on an Israeli kibbutz, became a central figure of the shadowy Labour Together, founded by John Clarke, a former Blue Labour director, and with its initial undeclared funding from Nevsky Capital founder Martin Taylor and from Trevor Chinn, who was awarded the Israeli ‘presidential medal of honour’ by Izaac Herzog in November 2024, for his service to the state of Israel.¹⁴

Morgan monster

By 2017 McSweeney had taken over as director of Labour Together, responsible to a board, which included Steve Reed, Lisa Nandy, Jon Cruddas and Chinn. Labour Together made extensive use of polling and focus groups to develop a strategy to select their candidate for the leadership of the Labour Party, finally alighting on Keir Starmer.

While comparisons between Dominic Cummings and Morgan McSweeney may seem commonplace, they do share some central characteristics. They are both seen as the architects of the success of those who are, formally, their political masters. They both seem completely contemptuous of junior MPs and the wider electorate, and apparently self-confident to the point of hubris.

Both are committed to ensure that the poor are made to pay for the destructive actions of the rich and both have a limited life span. The only question is: who will go first - Dr Frankenstein or his monster? My guess is the monster.