With ministers ‘on resignation watch’, welfare cuts could be make or break for Starmer

Liz Kendall, work and pensions secretary, is next week expected to announce savings of £5bn a year. Sound the alarms, writes John Rentoul

Keir Starmer let the cabinet meeting overrun on Tuesday to allow all ministers to speak on spending cuts, especially to welfare. According to Bloomberg, more than half of the 27 ministers in attendance urged Rachel Reeves, the chancellor, to rethink the plans.

The sense of alarm in No 10, which has only just begun to realise the strength of opposition to the cuts, is reflected in Bloomberg’s Ailbhe Rea reporting that some ministers are now on “resignation watch”.

Liz Kendall, work and pensions secretary, intends to make a statement next week on the government’s plan to make savings in the welfare bill of £5-6bn a year. This is money that Reeves needs to make her sums add up the following week when she publishes the Office for Budget Responsibility forecast for tax and spending.

But Starmer, Reeves and Kendall have realised, rather late in the day, that the cuts might be a political problem, even with a huge majority in parliament. Publicly, few MPs have spoken out. Richard Burgon, the Socialist Campaign Group MP who has only just had the Labour whip restored, asked a hostile question of the prime minister on Wednesday, demanding a wealth tax instead. He may well be cast out into the outer darkness again at some point, but the unhappiness he expressed is shared by large numbers of publicly loyal MPs.

Now we know it extends to the majority of Starmer’s cabinet – even if some of them argued that they personally didn’t have a problem with the cuts, but they thought it would be difficult to “sell” them to Labour MPs generally.

It has been left to well-informed former ministers to set out the seriousness of the government’s predicament most clearly. Ed Balls and George Osborne, the Statler and Waldorf of British political commentary, have been heckling from the sidelines again. In their podcast on Thursday, Balls said: “Cutting the benefits of the most vulnerable in our society who can’t work to pay for that [the fiscal challenge] is not going to work, and it’s not a Labour thing to do.”

That is strong language for someone married to a cabinet minister.

Osborne recalled his attempt as chancellor in the 2016 Budget to “reduce the generosity” of personal independence payments (PIP). Just as Starmer has been doing this week, he “made a big case about how we’ve got to deal with incapacity benefits going up” but Iain Duncan Smith resigned as work and pensions secretary, “and I had to back down on it”.

I don’t think Kendall, Duncan Smith’s successor, is one of the ministers on resignation watch. She is a Blairite who thinks that the rise and projected rise in long-term sickness and disability claims is the product of misaligned incentives. She intends to be a long-serving reforming minister who finally gets to grips with the problem and brings the numbers down – even while she negotiates tenaciously for cash in the short term to ease the path of reform.

Nor do I expect any other cabinet resignations. I am told Ed Miliband expressed his concern about the welfare cuts. He likes to be seen by party members as “on the left”, and may want them to think that he objected, but he has accepted every compromise to his own green principles so far, and is unlikely to resign on a point of principle in someone else’s department. Lucy Powell, leader of the Commons and Miliband’s former leadership campaign manager, also raised concerns, but I don’t think she will quit either.

If anyone does resign, I would expect it to be a junior minister with less to lose. Stephen Timms, the minister for social security and disability in Kendall’s department, is someone steeped in the complexities of welfare and a person of high integrity. The Labour whips (they ought to have armbands with “resignation watch” on them, like “neighbourhood watch”) must have talked to him.

Or it could be an ambitious youngster who chafes at the impotence of junior ministerial life, as detailed by Chris Mullin in his entertaining diaries, and who sees a stand on an issue of principle as a route to greater things – although it is a bit early in the parliament for that.

The threat of ministerial resignations has certainly focused minds in No 10 and the Treasury on the final balance between the welfare budget and the deep cuts already pencilled in for other departments.

We may find out next week if the revolt, so far behind closed doors, has secured Kendall any concessions from Reeves to ease the pain of what is nevertheless going to be an extremely difficult decision for the government.