The Labour government is preparing to unveil its green paper on welfare reform, a move that could ignite dissent within its own ranks.
With Chancellor Rachel Reeves aiming to trim billions from the welfare budget, concerns are growing among Labour MPs over potential cuts to disability benefits and out-of-work support. While the leadership stresses economic responsibility, discontent is quietly mounting.
As Labour grapples with balancing fiscal prudence and social protection, backbenchers are increasingly uneasy.
Many MPs have spent their careers fighting against austerity measures and welfare reductions, making it difficult to defend potential cuts to their constituents. The party’s reputation for protecting the welfare state is at stake, and any misstep could erode support among its core voters.
Labour’s internal struggle over welfare policy
The anticipated welfare reform has sparked unease within Labour, with many MPs privately voicing their discontent. According to the Guardian, the Department for Work and Pensions (DWP) will soon publish its proposals, with Reeves seeking to curb rising incapacity benefit claims.
The Office for Budget Responsibility (OBR) estimates that 7.9% of the working-age population could be on incapacity benefits by 2028-29, up from 7% in 2023-24. Reeves and Work and Pensions Secretary Liz Kendall argue that reforming the system is necessary to encourage people back into employment.
However, opposition is growing. Labour MPs who campaigned against the Conservative austerity measures of the past decade now find themselves in an uncomfortable position. According to party insiders, WhatsApp groups remain largely quiet, but frustration is evident in tearoom discussions.
Some backbenchers are particularly concerned about potential changes to Personal Independence Payments (PIP), a benefit unrelated to employment status. A Labour MP described the mood as “privately raging”, even though public criticism remains limited.
The party’s traditional commitment to welfare support makes the situation especially sensitive.
While Justice Secretary Shabana Mahmood has defended the need for reform, describing it as a “moral case” for supporting people into work, left-leaning MPs argue that welfare is a cornerstone of Labour’s identity. If cuts go too far, they risk alienating a significant faction within the party and the electorate.
Political fallout and strategic calculations
Labour’s leadership is taking steps to manage internal tensions. According to sources, Keir Starmer has been holding private meetings with small groups of MPs to discuss policy direction. The government is also distributing unpaid “champion” roles to backbenchers, ensuring they remain engaged rather than disillusioned.
Despite these efforts, trust issues persist. The Treasury and DWP have historically had a fraught relationship, with the former sceptical of high welfare spending.
While Reeves has positioned herself as a pragmatic and disciplined chancellor, some colleagues question the flexibility of her fiscal rules. Her approach, once dubbed “ironclad”, has faced scrutiny as she adjusts targets to maintain financial credibility.
Labour MPs are aware of the political risks of welfare cuts. According to party insiders, some who oppose the changes are reluctant to speak out now, instead waiting for broader discontent to build. If the government moves too aggressively, dissent could escalate beyond quiet frustration into an open challenge to Starmer’s leadership.
