After the 2010 general election, Byrne was appointed by new Labour leader Ed Miliband to lead Labour's policy revieW for two years. He was Shadow Secretary of State for Work and Pensions from January 2011 to October 2013. He was sacked after increasing criticism from Labour members and having "badly lost the confidence of the PLP", particularly after allegedly describing the Conservative-led coalition's benefits cap as "too soft, saying that "Ministers have bodged the rules so the cap won't affect Britain's 4,000 largest families and it does nothing to stop people living a life on welfare".