Sir Keir Starmer has lost control of the Labour Party
Once you pay the Danegeld, you never get rid of the Dane. As Kipling observed in 1911, it’s tempting to “a rich and lazy nation” to try to spend its way out of trouble rather than deal with the fundamental problem.
In surrendering to his rebellious backbenchers on his flagship benefit reforms, Sir Keir Starmer has followed exactly that path. There are, however, two problems with this approach. The first is that Britain, after decades of wasteful spending, and with a sky-high tax burden, is rapidly running out of fiscal road with which to buy out future opposition. The second is that Labour rebels will now smell blood in the water and they will undoubtedly turn their attention to thwarting the Government’s attempts to make savings elsewhere.
The bill for health and disability benefits is expected to reach £70 billion a year by the end of the decade. These measures were expected to cut them by just £5 billion. A previous climbdown this week had reduced that to £2.5 billion. Now what’s left of the Bill has been gutted, with the Government withdrawing elements in a panic.
That Sir Keir, who won a majority of 174 just a year ago, has found that he cannot make even a small change to a welfare system that is spiralling out of control without meeting mutiny from his Labour colleagues, speaks poorly of Britain’s ability to change course before it is forced to by circumstances beyond its control.
In the short run, the Government has a £5 billion hole to fix in its fiscal plans, and a blow to its credibility in the eyes of the bond markets. In the long run, its concession has made it significantly more tempting for Commons rebels to engage in games of chicken in the belief that Sir Keir will back down. The Prime Minister’s track record is already littered with U-turns and backtracks but this latest reverse has shown that he may simply be unable to manage his party, let alone govern this country. Indeed, even after this chaotic concession, 49 of his own MPs still voted against the Bill.
What prospect is there of Sir Keir and Rachel Reeves now getting to grips with the sort of large scale welfare reform that Britain really needs? The pressure, if anything, seems to be from an ascendant Left which demands more spending, more taxation, more state intervention in the economy: the scrapping of the two child benefit cap is already in the sights for some rebels. It is a bleak thought that Sir Keir’s response to this may be to tack Left. Once you pay the Danegeld ...
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