Disability benefit cuts: Sir Keir Starmer forced to make late concession in biggest Labour rebellion

Sir Keir Starmer was forced to abandon a key plank of his welfare reform agenda to get the legislation through its first Commons test.

In a late climbdown as MPs prepared to vote, the UK government shelved plans last night to restrict eligibility for the personal independence payment (Pip), with any changes now only coming after a review of the benefit.

The move will cause a headache for Chancellor Rachel Reeves, who has seen a forecast £4.8 billion saving from the welfare budget whittled away through a series of concessions, leaving her to seek extra money through spending cuts, tax hikes or borrowing to balance the books.

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The decision to remove the Pip changes from the Universal Credit and Personal Independence Payment Bill was announced just 90 minutes before MPs voted.

Prime Minister Sir Keir Starmer delivers a speech during a reception for public sector workers, at 10 Downing Street, London. Picture: Carl Court/PA Wireplaceholder image
Prime Minister Sir Keir Starmer delivers a speech during a reception for public sector workers, at 10 Downing Street, London. Picture: Carl Court/PA Wire

The legislation cleared its first hurdle by 335 votes to 260 – a majority of just 75.

Despite the late concession, there were 49 Labour rebels in what was the largest revolt so far of Sir Keir’s premiership.

Labour’s Brian Leishman, the MP for Alloa and Grangemouth who was among the rebels, said ministers should still withdraw the Bill despite the legislation passing its second reading.

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The Scottish MP had also voted in favour of a cross-party amendment that would have stopped the Bill before its second reading.

Prime Minister Sir Keir Starmer delivers a speech during a reception for public sector workers, at 10 Downing Street, London. Picture: Carl Court/PA Wireplaceholder image
Prime Minister Sir Keir Starmer delivers a speech during a reception for public sector workers, at 10 Downing Street, London. Picture: Carl Court/PA Wire

He said: “Today was a prime example in how not to legislate. A shambolic afternoon with policy being made up off the cuff and on the notion of promises to come.

“The government should do the honourable and decent thing and withdraw this dreadful Bill.”

Work and Pensions Secretary Liz Kendall insisted the Labour Party was “100 per cent” behind the Prime Minister, but acknowledged there were “lessons to be learned” after the rebellion.

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She also appeared to express regret over the handling of the issue, saying: “I wish we had got to this point in a different way.”

The decision to remove key parts of the Bill is remarkable for a government with a working majority of 165 and after just under a year in office.

This personal independence payments is devolved in Scotland as the adult disability benefit. But any cuts at UK-level would affect how much money the Scottish Government receives from the Treasury for the payments.

Other Scottish Labour MPs who had opposed the original Bill had included Patricia Ferguson, Tracy Gilbert, Dr Scott Arthur, Kirsteen Sullivan, Richard Baker, Euan Stainbank, Lillian Jones, Elaine Stewart, Martin Rhodes and Irene Campbell.

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Tory leader Kemi Badenoch accused ministers of “utter capitulation” and said the legislation was now “pointless”.

She said: “They should bin it, do their homework, and come back with something serious. Starmer cannot govern.”

SNP Westminster leader Stephen Flynn said: "From start to finish, Labour’s disability cuts Bill has been a shambles – and it defines their chaotic first year in office.

"The cause of that chaos, and the blame for it, falls directly at the doors of Keir Starmer and Rachel Reeves. Tonight, the Labour Party owe an apology to disabled people. Their daily lives have been subjected to a cruel Westminster political game.

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"The final U-turn they deserve tonight is an apology from the Prime Minister and for this shambolic Bill to be scrapped.

"The only option left for the Labour Party is to stop their attack on disabled people, remove the threat of a two-tier disability system and for them to finally scrap this bill."

The government’s concessions mean it will not make any savings as a result of its welfare reforms by 2029/30, but could in the longer term, think-tank Resolution Foundation said.

The organisation’s chief executive Ruth Curtice said: “The government originally hoped to save £4.8bn from its welfare reforms in the crucial year of 29/30.

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“The upshot of all the concessions this week is it will now not make any net savings in that year. The changes to universal credit are nonetheless important for recipients and their work incentives, and are expected to save money in the longer term.”

Earlier, a Labour rebel attempt to halt the legislation was defeated by 179 votes.

A total of 44 Labour MPs including two tellers backed the bid by rebel ringleader Rachael Maskell, who described the Bill as “unravelling” and “a complete farce”.

A previous effort to kill the Bill had attracted more than 120 Labour supporters, but was dropped after the first partial U-turn on the legislation last week, which restricted the Pip changes to new claimants from November 2026.

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That date has now been abandoned in the latest climbdown, with any changes now only coming after disability minister Sir Stephen Timms’ review of the Pip assessment process.

Sir Stephen announced the climbdown in the middle of the debate on the legislation.

He acknowledged “concerns that the changes to Pip are coming ahead of the conclusions of the review of the assessment that I will be leading”.

He said the government would now “only make changes to Pip eligibility activities and descriptors following that review”, which is due to conclude in the autumn of 2026.

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The concession came after frantic behind-the-scenes negotiations in Westminster involving the Prime Minister, his Cabinet and wavering Labour MPs.

Charlotte Gill, head of campaigns and public affairs at the MS Society, said: “We thought last week’s so-called concessions were last minute. But these panicked 11th hour changes still don’t fix a rushed, poorly thought-out Bill.”

But Jon Sparkes, chief executive of learning disability charity Mencap, said: “The last-minute change relating to the review Sir Stephen Timms is leading sounds positive and we are pleased that the Government has listened.”

He added: “Disabled people should not have to pay to fix black holes in the public finances.”

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The government’s concessions have gutted the reforms, leaving only parts of the current Bill still on the table.

Proposals to cut the health element of universal credit by almost 50 per cent for most new claimants from April 2026 remain in place, along with an above-inflation increase in the benefit’s standard allowance.

In an earlier climbdown, Ms Kendall said existing recipients of the health element of universal credit, and new claimants with the most severe conditions, would have their incomes “fully protected in real terms”.

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