Andy Burnham is up for overhauling the welfare system and knows it is “absolutely necessary”, according to the author of a report which exposed the scale of the youth job crisis in Britain.
Former health secretary Alan Milburn said in his government-backed report that youth unemployment was costing Britain more than £125bn a year as he urged ministers to consider changes to the welfare system.
Speaking at an event hosted by the Centre for Social Justice (CSJ) think tank, Mr Milburn revealed he has held private talks with Mr Burnham and agreed the incoming prime minister will have the “appetite” to revisit welfare reforms during this parliament.
He told the event on Monday: “I’m not going to go into what we’ve discussed privately, but everything I’ve seen from Andy publicly suggests that he knows that welfare reform is absolutely necessary”.
He added: “Honestly, my sense is that the appetite within the Parliamentary Labour Party and the new administration will be absolutely up for this.”
Any move by Mr Burnham to overhaul the welfare system would test the resolve of Labour backbenchers after their rebellion prevented Sir Keir Starmer making £5bn of cuts last year.
However, the newly elected Makerfield MP, who is likely to be prime minister by 20 July, could look for an approach based on reform rather than simple cuts, which could quell any appetite for dissent.
Last year, under Sir Keir, the government was forced to U-turn on its controversial plans to cut spending on the Personal Independence Payment (PIP) by restricting its eligibility. If passed, the proposals would have cut £4.8bn from the welfare budget. Instead, only changes to the health-related element of universal credit were pushed through, for a reduced saving of £2.3bn.
Ministers dialled back the legislation after more than 100 Labour MPs rebelled over the measures, prompting the government to announce that disability minister Sir Stephen Timms would instead launch a review into the benefit, also expected to report in the autumn.
Reflecting on the episode, Mr Milburn said the government “got it wrong and got it framed in the wrong way” by presenting the policy as a “pure cost mechanism”.
“I think the right way to frame it is what we try to do in this review, which is to say: ‘Look, you’ve got a huge welfare problem now… the best and most sustainable way of doing it is to ensure that those young people get the opportunity to work so that they can be at work, they can pay their taxes and they become less dependent on benefits’.”
His comments come after several Labour welfare rebels told The Independent last week that Mr Burnham must rule out using welfare cuts to fill the £4.7bn black hole left by Sir Keir’s defence spending plan.
Rachael Maskell, a key figure of last year’s backbench rebellion, told The Independent: “Ensuring financial security for disabled people and people who are on poverty pay must remain the principle of our social security system, and while it is right that Labour does everything possible to help people into work to cut the demands on the DWP, cuts will simply displace the expenditure.”
Mr Milburn presented his interim “diagnostic” report in May, highlighting that more than 1 million young people in the UK are currently estimated to not be in employment, education, or training (Neet). This could rise to 1.25 million by the end of the decade if steps are not taken, he warned.
He wrote that this youth unemployment crisis is costing the country around £125bn a year, including £3.2bn being spent on health and disability benefits for Neet claimants.
His review also highlighted that the Department for Work and Pensions (DWP) spends £25 on youth welfare for every £1 it spends on helping young people into work.
“So precisely the thing that they want, which is support into work and the opportunity to do so, is exactly what the state isn’t providing … so that’s how you do welfare [reform]”, he said at CSJ event.
Welfare rights and disability campaigners have broadly agreed with Mr Milburn’s mission for reform, but argue it cannot be delivered purely on a cost-cutting basis.
James Taylor, director of strategy at disability equality charity Scope, said last week: “A new PM will have many different options and ways of investing in defence.
“We don’t need to – and should not – balance the books on the backs of disabled people.
“The benefits system needs reform, but reform cannot become code for cutting support. Life costs more if you are disabled, and everyday living costs remain stubbornly high.”
