Keir Starmer torn apart over 'humiliating U-turn' on welfare cuts

Conservative leader Kemi Badenoch says the benefits u-turn shows Keir Starmer can't make decisions about big issues

Sir Keir Starmer has insisted his welfare reforms now strike "the right balance" after his U-turn in the face of a Labour rebellion.

Speaking during a visit today, the Prime Minister said: "It's very important that we reform the welfare system, because it doesn't work and it traps people, and therefore we're going to press ahead with the reforms. And the principles are if you can work, you should work. If you need help getting into work, you should have that help and support. But if you can't work or there's no prospect of work, then you must be protected.

"We need to get it right. That's why we've been talking to colleagues and having a constructive discussion. We've now arrived at a package that delivers on the principles with some adjustments, and that's the right reform, and I'm really pleased now that we're able to take this forward."

Asked what the Government would do about a "hole" in the public finances the changes are said to leave, he said: "Well, the changes still mean we can deliver the reforms that we need, and that's very important, because the system needs to be a system that is fit for the future, and this is fit for the future.

"All colleagues are signed up to that, but having listened, we've made the adjustments. The funding will be set out in the budget in the usual way, as you'd expect later in the year.

"But the most important thing is that we can make the reform we need. We can talk to colleagues who've made powerful representations as a result of which we've got a package, which I think can work... For me, getting that package adjusted in that way is the right thing to do. It makes the right balance. It's common sense and we can now get on with it."

Of course, Kemi Badenoch is continuing a Tory leader tradition. Here's Maggie Thatcher in 1986

Kemi Badenoch has been snapped at Carver Barracks in her North Essex constituency, including pointing an assault rifle at a member of the army and poking her head out of an armoured vehicle

Kemi Badenoch has said Labour's U-turn on welfare shows they cannot handle major issues.

Speaking on a visit to Carver Barracks in her constituency, the Conservative leader said: "Just yesterday we saw that the Government is unable to make some minor savings on welfare.

"If they can't do reduced increase in spending, how are they going to find the money to pay for defence. I don't see where the 4.1% is coming from."

She added: "If they can't solve minor problems, how can they deal with the big ones."

She went on to call for a return to in-person assessments for disability benefits, saying: "There are a lot of people who should be at work who are just ringing up, who are getting benefits that they are not entitled to."

Mrs Badenoch added that people with "low level conditions like anxiety" would be better off in a "healthy work environment" rather than claiming disability benefits.

Kemi Badenoch said the Government's welfare concessions were "the worst of all worlds".

Speaking during a visit to North West Essex, the Tory leader said: "I think we're seeing a Government that is floundering, a Government that is no longer in control despite having a huge majority.

"I don't see how they're going to be able to deliver any of the things they promised if they can't do something as basic as reducing an increase in spending."

She added: "It's a real shame because what they're doing now with this U-turn is creating a two-tier system ... this is the worst of all worlds."

The Prime Minister is "fully committed to engaging with parliamentarians", Downing Street has said amid criticism of the Government's handling of its backbenchers.

A Number 10 spokesman said: "The Prime Minister consistently engages with colleagues in Parliament, participates in votes, delivers oral statements to update the House, including yesterday.

"As you know, parliamentary engagement takes many forms."

He added: "He remains fully committed to engaging with parliamentarians."

Downing Street dismissed suggestions that the Prime Minister's leadership had been marked by a tendency to cave in to opposition on key policies.

Asked whether there was a concern that the public might think Sir Keir Starmer does not "stand for anything", a Number 10 spokesman said: "It's not unusual as part of the parliamentary process to introduce a Bill, have a debate about the principles and then look at how those are implemented.

"Sometimes that's with amendments along the way."

Asked whether there was a pattern to Sir Keir's leadership in which he caves in if "enough people kick up a fuss", the spokesman said: "I don't accept that. This is a Government that listens."

Liz Kendall insisted Labour was in "a good place now" on the welfare Bill after a major Government climbdown.

The Work and Pensions Secretary told broadcasters: "We have listened to people, we have engaged with them.

"I think we're in a good place now, alongside the huge investments we are putting in to create the jobs that people need in every part of the country, to get waiting lists down in the NHS, to ensure stronger rights at work, but also to make sure there's employment support for those who can work and protections for those who can't."

Asked whether the Government had created a disparity between existing and new claimants, she insisted it was "very common in the welfare system that there are protections for existing claimants".

"That's happened before," she said.

It was put to her that it had clearly been difficult having to water down reforms she had so strenuously defended, to which Ms Kendall replied: "I don't find it difficult, because the principles that I strongly believe in that work for those who can is the best route out of poverty, that good work is the key to dignity, self-fulfillment and purpose, that we must protect those who can never work, that is really, really important.

"Those principles are ones we all agree on. We're in the right place with the changes we've made."

Shadow Chancellor Sir Mel Stride said: “Labour promised not to raise taxes on working people, and their jobs tax has led to rising unemployment and growth being halved.

"Now the Government have been unable to rule out that taxes will go up this autumn in order to pay for Keir Starmer’s latest U-turns. This is a crisis made in Downing Street, Labour must stop making the British people pay the price for their failures.”

Reform UK deputy leader Richard Tice said: “This is yet another humiliating U-turn by the Prime Minister. It’s becoming increasingly apparent that you can’t trust a thing this government says. The welfare bill must be cut before it spirals out of control, but Starmer is playing party politics with the public finances.

“This backtrack is going to create a multi-billion black hole that, alongside the £120 billion of extra borrowing Labour committed to in the spending review”

In a late-night letter to MPs, Work and Pensions Secretary Liz Kendall conceded two changes to the welfare Bill.

In recognition of the "uncertainty and anxiety" caused by the proposed changes, she said all current Pip recipients would keep their benefits, saying only new claims from November 2026 will come under the tightened eligibility requirements.

An impact assessment had stated that 370,000 current recipients were set to lose Pip entitlement across England and Wales.

Ms Kendall also vowed all those currently receiving the Universal Credit health element, as well as new claimants meeting the severe conditions criteria, will have their incomes "fully protected in real terms".

The Work and Pensions Secretary has also promised a review of the Pip assessment, led by social security and disability minister Sir Stephen Timms, which will have input from disabled people "to ensure the benefit is fair and fit for the future".

The Government is forecast to have spent £313.0 billion on welfare in 2024/25, according to the Office for Budget Responsibility (OBR).

This is the equivalent of 10.9% of UK GDP (gross domestic product, or the total value of the economy).

The OBR forecasts annual spending on welfare to reach £373.4 billion in 2029/30.

This is up £60.4 billion on the figure for 2024/25 – an increase of nearly a fifth.

Welfare spending as a proportion of GDP is forecast to fall slightly to 10.8%, however.

Liberal Democrat Work and Pensions spokesperson Steve Darling MP said: “It should not have taken a major rebellion for the Government to realise that these cuts would cause immense damage to some of the most vulnerable and risk creating a false economy by actually forcing some people out of work.

“The Government should still pull this bill before the vote on Tuesday and go back to the drawing board. In the absence of any impact assessment, MPs still do not have the full facts and those who are affected have still not been consulted on these changes.

“Liberal Democrats will continue to oppose this bill that risks stripping thousands of carers of vital assistance and leaving some of the most vulnerable without support.”

A Labour minister has denied that the U-turn to the welfare Bill showed Sir Keir Starmer could be swayed.

When pressed about the third U-turn the Labour Party has made since its term began, Stephen Kinnock told the Today programme on BBC Radio 4: "I think if you talk to people in the country, they respond very positively to politicians listening, engaging, recognising that we don't get everything right and making the adjustments and changes that are needed."

The WASPI women have come out to demand that Keir Starmer now makes a third U-turn on welfare after climbing down on both Winter Fuel cuts and PIP cuts.

A spokesman says it's now time to secure compensation and end the betrayal.

Angela Madden, chairman of the WASPI group, said: "Winter fuel and the PIP are but two of Labour’s major political mistakes and betrayals."

“Compensation to WASPI women should now make for a hat trick of u-turns.

“The independent Ombudsman’s report was clear in endorsing compensation for 1950s women. Ministers should stop wasting taxpayers’ money fighting us in court and agree to honour that recommendation.”

The changes to the welfare Bill might cost as much as £3 billion, according to the chief executive of a living standards think tank.

Ruth Curtice, who runs the Resolution Foundation, told the Today programme on BBC Radio 4: "The Institute for Fiscal Studies said (it would cost) £1.5 billion yesterday on the Pip changes.

"I think it's more like £3 billion: you have the changes to Pip which cost £1.5 billion to £2 billion when you also take into account consequentials for things like carer's allowance, but they've also said the freeze that they were going to introduce on universal credit health-related support will be undone and that will now rise in real terms and we estimate that will cost another £1 billion."

She added that the U-turn on the winter fuel allowance would cost another £1 billion and spending totals were effectively set having finished the spending reviews - meaning the money would likely come from tax rises.

The Government has reached a "workable compromise" with Labour rebels, the proposer of the amendment that could have halted the welfare Bill has said.

Dame Meg Hillier said: "This is a positive outcome that has seen the Government listen and engage with the concerns of Labour MPs and their constituents. It's encouraging that we have reached what I believe is a workable compromise that will protect disabled people and support people back into work while ensuring the welfare system can be meaningfully reformed.

"This means that disabled people currently in receipt of Pip and the health element of universal credit will continue to receive the same level of support.

"That future changes to disability support will be co-produced with disabled people, building on the work of minister Stephen Timms MP to create a system that involves disabled people in decisions about their lives.

"And that employment support will be brought forward and substantially improved so that people who want to work are not trapped in the benefit system.

"This is a good and workable compromise and shows that the Labour Government has listened and that working together with Labour MPs can move forward to support vulnerable disabled people, reform the welfare system in a just and inclusive way and contribute towards the economic growth and prosperity this country so desperately needs."

A Labour minister has declined to say how the U-turn on welfare cuts would be paid for.

Asked how the costs would be covered, health minister Stephen Kinnock told Times Radio: "The full details around what we are laying out, what I've summarised really today, is going to be laid out in Parliament, and then the Chancellor will set out the budget in the autumn the whole of the fiscal position and this will be an important part of that.

"But forgive me, I'm not in a position to set those figures out now.

"I think that is very much the Chancellor's job as we move into the budget in the autumn."

A Labour minister has insisted he is confident that the Government's welfare reforms would pass the Commons after a major climbdown in the face of a Labour rebellion.

Asked by Times Radio, health minister Stephen Kinnock said: "Yes."

Nadia Whittome, the Labour MP for Nottingham East, said on X that she would still vote against the Bill.

She added: "These concessions aren't enough and they should worry us all. If you become disabled tomorrow, you risk not having the support you need. We would be condemning future generations of disabled people to greater poverty."

Leeds East MP Richard Burgon said the changes "may make a very bad Bill less awful".

He added: "But the vast majority of cuts remain and it still forces hundreds of thousands into poverty. Nowhere near good enough.

"I'll vote against the Bill. The Government shouldn't be balancing the books on the backs of disabled people."

Norwich South MP Clive Lewis added: "Every MP will have to weigh up the deal for themselves.

"Alas, this smacks of a face-saving exercise more than it does doing right by my sick and disabled constituents.

"No impact assessment. No co-production with disabled groups. No deal. I’ll still be voting against."

Crawley MP Peter Lamb wrote: "Have now heard what the new PIP deal is. It's for others to disclose and every MP must make up their own mind, but to me it's insufficient when better options have repeatedly been put forward and ignored. I will be voting for the amendment/against the bill, alone if necessary."

Veteran Labour MP Diane Abbott, a close ally of former leader Jeremy Corbyn, wrote on X: "Phoney ‘concessions’ will not fundamentally improve disability benefit cuts bill. Dropping it is the only way."

Shadow Work and Pensions Secretary Helen Whately MP said: “This is another humiliating U-turn forced upon Keir Starmer

“With the sickness benefits bill set to reach £100 billion by 2030 the country needs action. But Labour has lurched from a bad plan to a next-to-nothing plan.

“The latest ‘deal’ with Labour rebels sounds a lot like a two-tier benefits system, more likely to encourage anyone already on benefits to stay there rather than get into work.

“We made a serious offer to Keir Starmer in the national interest if he was willing to grip the challenge of getting the welfare bill down and more people into work - making savings to avoid putting up taxes. But instead, he's done yet another U-turn.”

Labour has made concessions to rebels on controversial welfare reforms.

A letter last night from Work and Pensions Secretary Liz Kendall to MPs said people who currently receive the personal independence payment (Pip) will continue to do so and that adjustments to universal credit would also see incomes protected.

It comes after 126 Labour backbenchers signed an amendment that would have stopped the legislation in its tracks.

Sir Keir Starmer's Universal Credit and Personal Independence Payment Bill has its second reading on Tuesday, the first opportunity for MPs to support or reject it.