MPs have backed a Government proposal to reform welfare payments for sick and disabled people, but only after significant concessions saw much of Sir Keir Starmer's plan abandoned. The vote on Tuesday allowed the Universal Credit and Personal Independence Payment Bill to advance, despite fierce opposition from Labour's own backbenchers.
Some 126 Labour MPs had previously threatened to vote against the legislation, enough to block its passage through the Commons. In the end, only 49 rebelled against the Government, but ministers were forced to offer a series of major concessions to persuade the rebels to back down.
Government forced into major U-turn
Last week, Work and Pensions Secretary Liz Kendall announced a partial U-turn aimed at heading off the rebellion. Changes to Personal Independence Payment (Pip) eligibility would only come into effect in November 2026, and anyone claiming the benefit before that date would not be subject to the new rules.
People claiming the health element of universal credit, and new claimants with the most severe conditions, would see their incomes protected in real terms. Disabilities minister Sir Stephen Timms would also conduct a review of the Pip assessment, "co-produced" with disabled people.
Further delays announced during debate
During Tuesday's debate, Sir Stephen offered an additional concession, saying any changes to Pip eligibility would only be introduced after his review had concluded. This further delays the implementation to an unspecified date, removing a major part of the Government's reform plans.
The proposed changes to universal credit remain, raising the standard allowance while halving the health element for most new claimants from April 2026. However, the concessions will pose a significant problem for Chancellor Rachel Reeves, who will need to find extra money now the expected savings from welfare reform are no longer expected to materialise.
Fiscal targets under threat
The Resolution Foundation think tank suggested the concessions meant there would now be no "net savings" from the reform by 2029/30, a key year for Ms Reeves' fiscal targets. The Government has pledged to make the necessary amendments to remove the Pip changes from the Bill when it returns to the Commons next week.
The legislation is then likely to continue through Parliament, becoming law after approval by both MPs and peers. But wider questions remain for the Government, with Ms Reeves facing a fiscal headache and the Prime Minister potentially confronting a political one as he seeks to repair fractured relations with his backbenchers.
Uncertainty continues over welfare plans
Ministers will still want to reduce the cost of the welfare bill and get more people back into work. Sir Stephen's Pip review could result in another row depending on what it recommends, leaving uncertainty surrounding the Government's plans for welfare reform.
(PA) Note: This article has been edited with the help of Artificial Intelligence.
