Liz Kendall has done the impossible: Cut the welfare budget and crushed a Labour rebellion

The test for Liz Kendall was simple, according to one Labour insider. If the response to her statement is dominated by wheelchair users protesting that they will be worse off, she will have failed. If, on the other hand, the focus of the debate is about getting more people into work, she will have succeeded.

It is early days yet, and these things have a tendency to contain hidden landmines in the technical rules, but the work and pensions secretary has already cleared two important hurdles.

One was the response in the House of Commons. The Conservatives said the welfare changes do not go far enough, even though they were in a position to do something about that only eight months ago. So the response that mattered was on the Labour side. A handful of Labour MPs were unhappy about the statement, but their tone was mostly muted.

Zarah Sultana was unmuted, but she has been suspended as a Labour MP. As I surveyed the succession of Labour backbenchers, most of them elected only eight months ago, rising to praise Kendall’s effort to get their constituents off benefits and into work, I marvelled at the work done by Morgan and the Two Matts on the selection of candidates.

Morgan McSweeney, now Keir Starmer’s chief of staff, along with Matt Faulding and Matt Pound, took candidate selection more seriously than any party ever has before – and today we saw the results of their hard work.

Thus Kendall passed the first test with relative ease. She took questions from 100 backbenchers after her statement, repeating her mantra that “millions of people who could work are trapped on benefits and denied an income they deserve”.

A few hours later, she passed her second test, when the Institute for Fiscal Studies published its response to her proposals. The IFS, the most respected source of independent scrutiny, noted that her plans mark a “fundamental” shift from health-related benefits to “basic out-of-work support”. It sounded a bit sceptical about the level of detail, and whether the shift in incentives was aimed at the right group of people, but the important point is that it did not identify a group who might lose out unfairly – which is where Kendall might have had a political problem.

The bottom line is that Kendall’s changes mean that spending on benefits will continue to rise over the next five years, but instead of rising by ?25bn a year, it will rise by ?20bn a year – therefore saving the ?5bn a year that Rachel Reeves needs to make her sums add up next week.

It is hard to present this reduction in generosity of benefits as a “cut”, but that does require a sustained effort by Kendall and her ministerial colleagues to emphasise that the overall budget is still rising while the system is being reformed.

Pat McFadden, the Blairite Cabinet Office minister, did a good communications job, preparing for Kendall’s statement on the BBC’s Today programme this morning. He said: “You can’t tax and borrow your way out of the need to reform the state.” And he reminded those Labour MPs who were minded to oppose the proposals that they were “elected on a platform of change”. The word Change, indeed, was the title of Labour’s manifesto.

Some of them grumble, off the record, that these are not the sort of changes that they joined the party to make. But the most striking feature of the response to Kendall’s statement was the number of new Labour MPs who said that they did not come into politics to prop up a system that dumped one in 10 people of working age on sickness benefits – and left them there.