Labour is fast discovering that Britain needs more than a Band-Aid to restore it to health | Isabel Hardman

When Keir Starmer was just the lowly leader of the opposition, he made one of his themes “sticking-plaster politics”. It was a critique of the way that Westminster tends to focus intensely on something for a short while, before flitting off to another crisis and solving nothing along the way. It made a lot of sense for Starmer to complain about short-termism in politics: the Tories were bouncing from one problem to another, and, besides, every leader of the opposition likes to opine worthily about broken politics from the convenient distance of not being in power and having to fix it. Well, now he is in power, and is faced with all the temptations to leave the Band-Aids firmly in place.

One Labour figure describes the DWP as “the bucket into which all the failures of other departments are poured”

There is no department that is a better example of what happens when you have a sticking-plaster approach than Work and Pensions. It responds to breakdowns elsewhere: long-term sickness driven by even longer NHS waiting lists, insecure employment and skills shortages. If the health service isn’t treating people in a timely fashion, they end up out of work, often with their problems and quality of life deteriorating. If the Treasury isn’t creating the conditions for economic growth, the out-of-work benefits bill stays high. If Education and Business aren’t ensuring that workers have the skills that make bosses want to hire them rather than recruit from abroad, the DWP picks up the bill. One Labour figure describes it as “the bucket into which all the failures of other departments are poured”.

At the moment, it is a very big bucket: there are 2.8 million people out of work due to long-term sickness . It is also expensive. The cost of benefits supporting people who are disabled or have long-term health conditions (including those in work) is forecast to rise by £10.6bn by 2028/29 to £79.6bn. Youth unemployment is becoming a particular problem. The number of young people classed as economically inactive – not in or looking for work – has increased by 245,000 on last year, to 2.99 million in April to June 2024.

The Conservatives made some headline-grabbing announcements very close to the election about tackling what Rishi Sunak called the “sicknote culture” , but the timing suggested that the then prime minister was more interested in campaigning than dealing with the problem. Now, it’s Labour’s job.

Welfare was already going to be one of the big political battlegrounds of the autumn, with a white paper due on getting people back into work. But the riots have underlined the importance of this: the worst disorder tended to be in towns where the percentage of people out of work is high and roughly the same today as it was in 2011. After those riots 13 years ago, the political attention was largely focused on dealing with “troubled families”, but not on the difficult issue of long-term unemployment. Those politicians who did want to offer more than a sticking plaster, like Iain Duncan Smith, found their reforms ultimately thwarted by Treasury penny-pinchers like George Osborne, who kept chipping away at the initial investment that the benefits system needed so that people could move back into work and off costly benefits.

We are coming to the end of the comparatively easy bit of this government’s response to these riots, which is the swift justice meted out to those involved in the disorder. Courts have taken rioting cases quickly and live-streamed the sentencing. That seems to have worked well as a deterrent to anyone immediately considering going on a rampage, but the underlying problems are the same.

Governments don’t end up doing sticking-plaster policymaking just because they have a short-termist mindset, as Starmer has argued. Welfare policy is – and should be, given its subject matter – extremely complex and emotive. Even when you are announcing something that you genuinely want to work, rather than just serve as a campaigning tool, it is very easy to get it very wrong, to cause devastating unintended consequences, or for it just not to do anything other than cost a lot of money. The Tories know this, and Labour does too, because both have struggled with welfare reform even when they have been thinking long term.

Both parties have their mental stumbling blocks. For the Tories, it has always been the temptation to use benefits as a device, rather than see them as a policy issue. Strivers v skivers, “sicknote culture”, all that sort of stuff that makes a good talking point but has nothing to do with reality. Labour finds the topic hugely emotive and always has to balance its policies against what its own party will weather. Neither mindset really acknowledges that bucket problem, though: if the DWP is a ministry that largely accounts for the failures of other departments, then changing benefits policy isn’t going to be the answer to the benefits bill.

Welfare policy is – and should be – extremely complex and emotive… it is very easy to get it very wrong

Up to now, the sticking-plaster approach has been for politicians to muse openly about whether people with mental health conditions are really too sick to work, or whether introducing more sanctions will force lazy people to look for a job. But that kind of tweaking doesn’t deal with the health problems themselves, or improve the skills and employability, or, indeed, the employment opportunities.

Alan Milburn, a former Labour health secretary who is now enmeshed in the new government, made this point in his recent report with Barnsley council about pathways into work . He argued that policymakers had largely relied on toughening up the benefits system to deal with what was a “health-related problem”. He launched that report earlier in the summer with the work and pensions secretary, Liz Kendall, who saw it as an example of how local areas are much better at identifying their own employment problems than her own centralised department. She wants to change the DWP from being an administrative department of welfare to being a department of work. At the same time, the health secretary, Wes Streeting, has declared his own department “ an economic growth department ”. The two are working closely together.

They can rebrand their departments all they want, but nothing will really change unless the Treasury is prepared to stump up the initial cash for the kinds of reforms that both need to get people back into work. The last Labour government poured too much cash too quickly into the NHS, and it is definitely not the case that all the problems in the health service today can be solved with more money. But some problems really are caused by underinvestment, particularly in mental health services. A government cannot talk about the need for people to keep their side of the social contract by going to work if they can, when it is breaking its own side of that agreement by failing to offer them appropriate and timely treatment. When Sunak announced that too many people were off sick when they shouldn’t be, he failed to acknowledge that most of them agreed, and were waiting for the therapy they needed to deal with entirely treatable but still debilitating conditions. That costs money upfront.

Spending money now to save money later is not an argument that the Treasury has historically liked to hear. It is an argument that is put to it a lot, and one it frequently ignores, not least because the sums around how much will actually be saved tend to be a bit dodgy. Labour ministers today insist that Rachel Reeves doesn’t have that instinctive suspicion of upfront investment to cut bills later down the line. If this is true, then she will be a very remarkable chancellor. But she is also looking for early savings from the welfare bill as one of the few unprotected big spending pots that you can chip away at without causing a difficult row with the public.

She may well understand the long-term argument about the welfare savings from a functioning NHS, a modern education system and business not reliant on overseas workers. But she needs the savings now, not at the end of big reforms in those areas. And so the temptation for more sticking-plaster policies is still enormous, whatever Starmer might have argued in opposition. If he and the chancellor cave in, then the DWP is going to need an even bigger bucket.

• Isabel Hardman is assistant editor of the Spectator and a presenter of Radio 4’s The Week in Westminster