Government officials have admitted they made a mistake by making the financial case for cutting benefits as they steel themselves for as many as 50LabourMPs rebelling against the welfare bill that is being published on Wednesday.
Sources told the Guardian that they now believed the party should have focused on the moral case for reforming the welfare system, arguing that it was letting down millions of people who could be supported into work.
Labour insiders believe they could have kept more MPs on side if they had not highlighted the £5bn savings the Treasury would make as a result of the cuts to health and disability benefits that have so angered the party.
At the time of the spring statement, ministers said there were two justifications for the move: one was to get people off benefits in the long term, but the justification for the immediate cut to incapacity benefit was to make sure the system remained financially sustainable.
Rachel Reeves told MPs: “These plans mean that welfare spending as a share of GDP will fall between 2026-27 and the end of the forecast period. We are reforming our welfare system, making it more sustainable, protecting the most vulnerable and supporting more people back into secure work lifting them out of poverty.”
Labour MPs are demanding big changes to the proposals first put forward in March in thewelfare green paper, including a rethink on eligibility for personal independence payments (Pip) for disabled people and benefits for carers.
Kendall’s plans to save £5bn a year by overhauling the welfare system, including by cutting Pip, triggered alarm in the party, with experts saying that up to1.2 million people with disabilitiesare expected to lose thousands of pounds a year.
Nevertheless, the government is not expected to make any further changes to the welfare bill after it is published. “The £5bn is already spent,” said one senior government source. “Any further tweaks to the bill including on start dates or on criteria or tapering would mean that we start to spend money we don’t have. And this goes far beyond welfare.
“We have to be able to make tough decisions. We have to be able to make a budget add up in the autumn. We have to be able to make tough reforms that are the right thing to do. If we cannot get this through the consequences are far bigger than just this reform.”
Senior No 10 figures said the numbers who eventually rebelled or abstained might be as high as 50 – but did not believe Labour was at risk of losing the vote, which is expected in early July. “We think that when it comes to it, MPs will want to vote with their government,” one said.
The government has beenintensifying efforts to quell a growing rebellionoverwelfare cuts, with whips stepping up contact with MPs and strategists drawing up plans for a cabinet reshuffle in case of resignations.
Ministers are taking a carrot-and-stick approach by laying out extra support for people who face losing their benefits, while also warning mutinous MPs of the consequences of voting against the plans.
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Several MPs said that whips were strengthening efforts to bring them into line afterLiz Kendall, the work and pensions secretary,sought to ease concernsby promising extra protections for vulnerable people.
Labour whips have suggested that the expansion of free school meals earlier this month and big capital investment announced at the spending review – albeit alongside cuts to day-to-day departmental budgets – were also helping to reassure concerned MPs.
Government insiders admitted, however, that deep unease about the disability benefit cuts across the party meant there was no single leader of the group of rebel MPs, so it was difficult to predict the likely scale of any parliamentary mutiny.
Neil Duncan-Jordan, a Labour MP who has opposed the welfare reform plans, said: “The government will only withdraw its damaging disability benefit cuts if Labour MPs make clear they will vote against them.“The so-called concessions that have been suggested are nowhere near enough to undo the damage that is being proposed. The facts are undeniable: these cuts won’t create jobs – they’ll only push 3 million people deeper into hardship.“After 14 years of Tory cuts, the benefits system is already driving disabled people into destitution. Another wave of cuts won’t clean up their mess – it’ll make things worse. I urge ministers to pause, withdraw these cuts, and work with disabled people’s organisations to redesign a fairer benefits system.”