Welfare cuts: SNP accuse Sir Keir Starmer of creating 'two-tier disability system' with U-turn

Sir Keir Starmer has said his welfare reforms now strike “the right balance” after he U-turned in the face of a major backbench rebellion.

Speaking for the first time after Downing Street agreed a series of concessions on its welfare policy, the Prime Minister said the climbdown followed a “constructive discussion” with Labour rebels.

The U-turn now means those who currently receive personal independence payments or the health element of Universal Credit will continue to do so. Instead, the cuts will only hit future claimants.

Prime Minister Sir Keir Starmer | Eddie Mulholland/Press Association

It comes as a new survey showed Labour had closed the polling gap with Reform UK, but was still lagging Nigel Farge’s party in popularity.

Voters back Reform as the best party to deal with immigration and crime, but Labour holds a slim lead on most other policy areas, according to the BMG Research poll.

The poll showed Reform backed by 30 per cent of voters, with Labour on 27 per cent and the Conservatives with 19 per cent, followed by the Liberal Democrats on 12 per cent and the Greens taking 7 per cent. A total of1,617 UK adults were intervied online between June 24-25 for the survey.

The findings will come as a boost to Sir Ker in a week where his authority has been shaken by the major Labour rebellion on welfare cuts.

Some 126 Labour MPs had signed an amendment that would halt the Universal Credit and Personal Independence Payment Bill in its tracks when it faces its first Commons hurdle on Tuesday.

Leading rebels now believe the concessions on offer, which include protecting personal independence payments (Pip) for all existing claimants, will be enough to win over a majority.

However, the fallout threatens to cause lasting damage, as harder line rebels remain opposed to the legislation and some backbenchers have called for a reset of relations between Number 10 and the parliamentary party.

The reversal means Chancellor Rachel Reeves now faces a scramble to fill a potential hole in her budget this autumn, with the cuts now likely to save much less than the £4.8 billion the UK government had expected.

Economists at the Institute for Fiscal Studies and the Resolution Foundation have both suggested the changes could reduce that figure by up to £3bn.

The Steamie newsletter brings unrivalled political analysis - subscribe here

But Downing Street has so far declined to set out its own figures for how much it now expects to save, or to say how the shortfall will be covered beyond insisting there would be no “permanent” increase in borrowing and refusing to rule out tax rises.

Sir Keir told broadcasters on Friday: “The most important thing is that we can make the reform we need. We talked to colleagues, who’ve made powerful representations, as a result of which we’ve got a package, which I think will work. We can get it right.

“For me, getting that package adjusted in that way is the right thing to do, it means it’s the right balance. It’s common sense that we can now get on with it.”

However, Sir Keir was accused by the SNP of “creating a two-tier disability system” after U-turning on his original proposals.

Disability benefits are devolved in Scotland as the adult disability payment, but any cuts at UK level would impact how much money the Scottish Government gets.

Scottish MPs have said the revised proposal would create a system where young disabled people were left worse off than older disabled people.

Stephen Flynn, the SNP’s Westminster leader, said: “Keir Starmer is on the brink of creating a two-tier disability system where the young will be treated worse than the old.

“The message from the Labour Party is clear - if you have an accident that causes a disability, develop a disability over time or if you have a child with a disability you will receive less support than those who have come before you.

SNP Westminster leader Stephen Flynn. | House of Commons

“I was a perfectly fit and healthy kid when I collapsed at school before spending 18 years on crutches. To think that a child in the same position now would be treated differently than I was, simply to save the Prime Minister’s reputation, is disgusting.

“If these rebels truly care about the cause in the way that they suggest, then they will tell the Prime Minister to think again, again.”

Labour backbencher Brian Leishman said: “This is not ‘caving in’. This would be a two-tier welfare programme that would still put people into poverty. This is not the society we should try to build. I will not support this.”

The Scottish Greens said it was “astonishing” the Labour government was pushing ahead with “such cruel and inhuman cuts”.

Party MSP Maggie Chapman said: “We’ve seen over the past 11 months of Starmer in Number 10 that he’s nothing more than a Tory in Labour clothing. We must keep up the pressure to ensure that new claimants get what they need, because these reforms will still hurt thousands of disabled people around the country for generations to come.”

This is the third U-turn the Prime Minister has been forced to make in just a month after reversing the government’s decisions on cutting winter fuel payments and on a grooming gangs scandal.

Dame Meg Hillier, one of the leading rebel voices, hailed the concessions as “a good deal” involving “massive changes” to protect vulnerable people and involve disabled people in the design of future reforms.

But Conservative leader Kemi Badenoch criticised the U-turn, saying the government’s failure to make “minor savings” on welfare showed they were unable to deal with major issues.

Citizens Advice Scotland said the U-turn was “nowhere near enough” and the two-tier system it would create was “highly problematic”.

Emma Jackson, a spokesperson for Citizens Advice, said: “It seems the UK government’s message is you’re OK if you are disabled today, but good luck if you become disabled tomorrow.”