Labour has become the party of welfare, not work
A generous interpretation of events would be to concede that Labour has avoided any attempt at welfare reform because it’s been waiting for the conclusions of Alan Milburn’s review into the crisis of youth unemployment.
Milburn, who served as health secretary under Tony Blair, will publish the first part of his government-commissioned report this week, though some key findings were unveiled over the weekend, including Milburn’s view that the welfare state is in need of a “system reset.”
The government’s early efforts to bring welfare spending under control met with failure after Labour MPs balked at the idea of trimming £5bn from the £300bn bill, but this debacle revealed a wider problem with Keir Starmer’s approach: it was presented as a necessary accounting adjustment rather than as part of a moral crusade to move people off benefits and into work.
Milburn was asked by the BBC on Sunday what his message is to Labour MPs uncomfortable with the welfare reform agenda, saying “Labour is what it says on the tin…it’s the party of work.” Except it isn’t; it’s the party of welfare.
The Milburn Review can now join the Mayfield Review, which looked at the UK’s problem with long-term inactivity and ill-health, and in time it can sit alongside the Timms Review which is due to report on the Personal Independence Payment (PIP) scheme towards the end of this year.
Labour MPs do not want to touch welfare
But who, by that point, will sit in Number Ten with these three reports spread on their desk? Andy Burnham? Wes Streeting? Angela Rayner? Even if a new PM wanted to devote their honeymoon period to making the moral case for welfare reform they will still face a parliamentary Labour party that views any attempt to reduce spending as a heartless hangover from Tory “austerity.”
And they will also face the consequences of a series of measures that have made hiring people – particularly young people – more expensive, more complex and higher risk.
One of Labour’s first acts was to increase employment taxes, and they’ve witnessed unemployment rise every month since. To this they’ve added a jungle of unnecessary new employment law and they’ve continued to hike the minimum wage while hammering the very sectors that tend to offer entry-level jobs. The number of long-term unemployed is now at its highest level since 2016.
Detailed, thoughtful reviews of the kind authored by Milburn, Mayfield and Timms are important, but so too is a recognition that a high-tax, low-growth economy offers poor foundations on which to build a healthy jobs market.