12 Nov 2026 - 7:00am
Another week, another Labour U-turn. Chancellor John Healey has abandoned a welfare fraud measure, previously proposed by his predecessor Rachel Reeves, that would have allowed the Department for Work and Pensions to stop anyone with over £16,000 in savings from collecting Universal Credit. Once again, Andy Burnham’s vibes-based government is offering little prospect of bringing the benefits bill down before the next election, despite the already-mounting pressure on public finances.
The move has given the Conservatives another opportunity to accuse Labour of surrender, and to offer a big benefit cut of their own. Kemi Badenoch has promised £36 billion in welfare savings, including a policy to reinstate the two-child benefit cap — a measure which is hated by Labour MPs, but supported by the public. Reform UK wants to cut around £50 billion from the benefits bill, almost entirely from working-age payments. The political dividing line is immediately clear: the Right wants to spend less on benefits, while Labour struggles to explain when its reforms will deliver any savings.
If Burnham thinks his softness will win over the public, he should think again. YouGov has found that 54% of Britons want welfare spending reduced, up from 41% last year. Cuts are now the most popular option among Labour voters, backed by 45%. Indeed, 54% of Labour voters support reinstating the two-child benefit cap.
Of course, wanting a smaller welfare budget does not equate to supporting every cut to a named benefit. But the polling does undermine the assumption that not rocking the boat and watching welfare spending continue to climb is necessarily the safest electoral course.
For Burnham, the main difficulty lies within the Parliamentary Labour Party. Last summer, Keir Starmer’s government proposed tightening eligibility for Personal Independence Payments (PIP), in order to save around £5 billion by 2030. For some MPs, this betrayed Labour’s core beliefs. Rachael Maskell denounced the proposals as “Dickensian cuts” belonging to “a different era and a different party”. The Government was forced into a humiliating retreat, and in true Starmer fashion the U-turn ended up costing about £3 billion.
Burnham has inherited that ideological constraint. He has rejected abrupt cuts and instead argues that reducing dependency requires more spending into employment support. That may be defensible policy, but it also allows him to promise eventual savings while avoiding any fight over who should lose out this side of an election. Even his proposed change to the pensions triple lock is scheduled for April 2030, with savings earmarked for social care.
The trouble is that this accommodation carries electoral costs. Northern Labour MPs have already warned that constituents on low incomes feel resentful to those receiving state handouts and could turn to Reform. Burnham must balance such sentiment against voters and MPs who view any spending crackdown as a return to Tory austerity. The Prime Minister must also please his own constituency of Makerfield, where PIP claimants make up over 10% of voters. The prospect of an early election would only sharpen that dilemma.
Burnham cannot satisfy every part of Labour’s coalition indefinitely. His challenge is to persuade his party that fiscal restraint need not amount to a betrayal of everything in which they believe. If he cannot, the Conservatives and Reform will keep offering an increasingly impatient electorate something Labour struggles to provide: a clear answer about what it would actually cut, and why. The longer he postpones that argument, the harder it becomes to claim that his government, rather than its opponents, is deciding the limits of reform.
