Labour MPs are showing increased willingness to support a renewed effort to reform the benefits system, provided new funding is directed at helping claimants into employment, party insiders have indicated. This development follows divisions within the Parliamentary Labour Party (PLP) that led to the defeat of a welfare cut proposal last year.
The push for reform has gained momentum after the release of a report by Alan Milburn, a senior Labour figure, which highlighted challenges faced by young people classified as not in employment, education, or training (NEET). Milburn’s report suggested overhauling health and disability benefits to better support young claimants and urged the government to incentivize employers to offer more opportunities to NEET individuals.
Meanwhile, internal communications recently revealed that Pat McFadden, the current Work and Pensions Secretary, expressed frustration with Labour backbenchers last year, characterizing them as focused on “who can we tax in order to pay benefits to others.” Conservative leader Kemi Badenoch seized on the comments during Prime Minister’s Questions, insisting that despite the government’s strong majority, reforming welfare remains politically difficult for Labour. Badenoch further argued that whether Sir Keir Starmer or Greater Manchester Mayor Andy Burnham leads the party, Labour MPs would consistently prioritize taxing others to fund benefits, a stance she described as intrinsic to the party.
However, Labour MPs who opposed last summer’s proposed welfare bill maintain that the party is ready to revisit the issue. One MP involved in opposing the bill described the situation as “incredibly frustrating,” attributing previous setbacks in part to failures within the party’s leadership. This MP emphasized that there remains “an appetite for reform” among the PLP.
Another MP among the rebels acknowledged a core group of roughly 30 backbenchers firmly opposed to any welfare changes but said a larger segment could be persuaded by strong arguments. A Labour insider echoed this sentiment, stating that avoiding welfare reform before the next general election would be “untenable.” On the earlier bill, insiders explained that it was viewed not as a comprehensive reform but rather a targeted cut to a specific benefit, which led to its rejection.
Some of those who opposed last year’s measures emphasize the need to understand the underlying causes of unemployment, including factors like poor mental health, which may prevent people from entering the workforce. They expressed support for parts of Milburn’s report that propose allocating some of the increasing resources spent on Personal Independence Payments (PIP) toward initiatives that improve employment prospects.
The leaked messages from McFadden also stirred discontent among certain Labour MPs. Rachael Maskell, MP for York Central, rejected McFadden’s characterization, stating that backbenchers had advocated for maintaining claimant independence as a cost-saving and outcome-improving measure, and lamented that McFadden never engaged with these perspectives. Meanwhile, another MP reiterated calls for higher taxes on the wealthy, framing the issue as one of basic justice amid growing wealth inequality and stagnant pay for millions.
As welfare reform discussions advance, Labour faces an internal balancing act between supporting claimants and addressing fiscal concerns—an issue likely to remain central in the run-up to the next general election.