The Lead Untangles: The benefit changes which caused Labour MPs to revolt
It became a rebellion – more than 120 MPs force the government to re-think the much criticised plans to reform welfare.
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At a glance facts
The Labour government faced its biggest rebellion so far over its plans to reform welfare and benefit payments, with more than 120 Labour MPs prepared to defy the whip and vote against the landmark legislation.
Labour backbenchers were particularly angry over cuts to the distribution of Personal Independence Payments [PIP], a benefit distributed on the basis of medical need to help meet the additional cost of managing disabilities and long term conditions. It is paid to all who qualify regardless of their earnings or work status. The package of planned reforms will also reduce payments for the health element of universal credit, which provides support to people whose capacity to work is limited by a disability or long-term medical condition. Measures contained in the bill included removing this support entirely for adults under the age of 22.
The rebellion followed the resignation of government whip Vicky Foxcroft last week over the issue. The critics were aiming to pause the proposed measures by passing a ‘reasoned amendment’ to the government’s welfare bill, which would halt its progress through parliament. The amendment explicitly states that the provisions in the bill “have not been subject to a formal consultation with disabled people, or co-produced with them or their carers”, would mean the bill could not pass its second reading.
There were enough rebels to wreck the government’s proposals, leaving a huge potential hole in the Treasury’s budget plans. But the issue of spiralling welfare costs persists: according to recent figures shared by cabinet member Pat McFadden, the number of people approved for PIP is rising by 1,000 a day.
On Thursday evening, it was reported that Starmer had offered ‘massive concessions’ on the welfare bill, including applying the changes only to new claimants and further consultation on the most controversial cuts.
The context
The government inherited a huge and growing welfare bill – in part because of over a decade of austerity policies and the fate of the NHS, which combined have left a large percentage of the population sicker and less able to access work. However, the party was also elected on a promise that that after years of state-shrinking Conservative government, there would be no more austerity.
According to the Office for National Statistics, disabled people in England are on average £65,000 less well off then non-disabled people. They are less likely to be homeowners, and more likely to live in social housing – and more likely to face homelessness too. There has been a three quarters increase in homelessness for disabled households in just seven years.
The government’s strategy hinges on redrawing the welfare package with the aim of helping more disabled people into work, but disability advocates argue that the opposite is true. PIP, for example, often pays for the adaptations and additional costs that help disabled people access work in the first place such as an adapted car so that commuting is possible.
Anger is rising because there is mounting expert evidence that the measures contained in the bill will simply not achieve its aims. The Resolution Foundation has calculated that all the benefit cuts contained in this bill could together boost employment, seeing somewhere between 38,000 and 57,000 more people in work by the end of this parliament. But, they warn, that is a maximum of 2 per cent of the more than 3 million people that could see their benefit payments drop.
And the Joseph Rowntree Foundation points out that there aren’t jobs for disabled to move into either. Its analysis of workplace openings found that there is only one “disability confident” role available for every 121 claiming incapacity benefits. The average is much higher (one to 333) in the former industrial heartlands – the areas where the government is being chased hard by Reform.
What are the rebels saying?
In a heartfelt resignation letter, Foxcroft wrote: “I knew life was difficult for disabled people, but via my engagement with disabled people and their organisations I would learn that it was even tougher than I had imagined…. I absolutely understand the need to address the ever-increasing welfare bill in these difficult economic times, but I have always believed this could and should be done by supporting more disabled people into work. I do not believe that cuts to personal independence payment and the health element of Universal Credit should be part of the solution.”
London Mayor Sadiq Khan is one of the most prominent figures preparing to rebel. He called on Starmer to “urgently think again” and warned of “the potential hardship these changes will force on thousands of vulnerable and disabled Londoners”.
What is the government saying?
Prime minister Keir Starmer had described the actions of the rebels with the dismissive phrase “noises off” and insisted next week’s vote is still set to go ahead as planned – a position that looked untenable unless cuts to PIP are removed from it.
Questioned on the future of the policy, he said: “We're committed to reforming our welfare system. It doesn't work. It traps people. And it has to be reformed. And it also has to ensure we've got a welfare system that is fit for the future. That is why there will be a vote and we will press ahead with the reforms.”
But during Thursday, amid frantic phone calls to MPs, it became clear the rebels would win major concessions as the government faced defeat in the Commons - despite its large majority.
Liz Kendall has reportedly told Labour MPs the PIP changes will only apply to future claimants and A No 10 spokesperson told BBC News said it had listened to MPs "who support the principle of reform but are worried about the pace of change" - while The Guardian reports ‘massive concessions’ have been agreed to for the rebels to fall in line and come back onside when it comes to the vote.
Downing Street has not commented on the concessions.
What are the Tories saying?
The Conservatives have said the bill in its current form is “not fit for purpose”. The party’s MPs are expected to either abstain from the vote, or vote it down. But Tory leader Kemi Badenoch has also made Starmer a bold offer: that she will instruct her party to back his bill if he meets three conditions – “to reduce the welfare budget, to get people into work and not to have tax rises”.
She added: “The bill is a bit of a mess. It needs some work. It looks like it’s been rushed for Rachel [Reeves] to fix other problems that they’ve got. But our welfare budget is too high, and we really need to bring it down.”
What comes next?
The government is still in talks with those who are dissenting, but it is clear now next week the terms of the bill are being altered - and it still may not pass its first reading.
Morgan McSweeney, Starmer’s chief of staff and influential strategists, took on one-on-one discussions with the most well known rebels. Considerations under discussion include a change in the number of points needed to claim eligibility for PIP and to the level of health support offered to those claiming Universal Credit and are out of work due to incapacity or disability.
But the government can no longer hide behind a misleading promise on pushing disabled people into work: there are too many on its own side unwilling to keep silent.
Whatever happens next, Starmer cannot simply “press ahead” as he planned. A substantial climbdown signals what could likely be the most pivotal moment in the first half of this parliament. ■
About The Lead Untangles: In an era where misinformation is actively and deliberately used by elected politicians and where advocates and opposers of beliefs state their point of view as fact, sometimes the most useful tool reporters have is to help readers make sense of the world.
The Lead Untangles is delivered each Friday by The Lead and focuses on a different complex, divisive issue with each edition. Is there something you’d like us to untangle, email ed@thelead.uk
About the author: Hannah Fearn is a freelance journalist specialising in social affairs. She was comment editor of The Independent for seven years, and has previously worked for The Guardian, Times Higher Education and Inside Housing. She has a special interest in inequality, poverty, housing, education and life chances.
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