Labour U-turn on benefits cuts in bid to win over rebel MPs

The National

3 days ago

In a letter sent from Work and Pensions Secretary Liz Kendall to MPs late on Thursday night, it was announced that people who currently receive the Personal Independence Payment (PIP) disability benefit would be exempt from planned cuts to eligibility.
Meanwhile, all current recipients of the Universal Credit health element – and any new applicants meeting the "severe conditions criteria" – will have their incomes protected in real terms.
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The announcement marks a watering down of Labour's original package, which restricted eligibility for PIP and limited the sickness-related element of Universal Credit.
The concession means that some 370,000 existing claimants who were expected to lose out following reassessment will now be protected, as the Institute for Fiscal Studies (IFS) calculated it will cost around £1.5 billion by the end of the Parliament.
However, new claimants from November 2026 will still be subject to these changes in eligibility requirements.
The late-night announcement comes after ministers held crisis talks with backbenchers, as more than 100 Labour MPs signed an amendment to halt the legislation in its track, supported by the SNP, Greens and several Independents.
The amendment, tabled by Treasury select committee chairwoman Dame Meg Hillier, notes that the UK Government's 'own impact assessment estimates that 250,000 people will be pushed into poverty as a result of [the bill], including 50,000 children".
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Keir Starmer's Universal Credit and Personal Independence Payment Bill will have its second reading on Tuesday, and is the first opportunity for MPs to support or reject it.
If it clears the first hurdle, it will then face a few hours' examination by all MPs the following week – rather than days or weeks in front of a committee tasked with looking at the bill.
A spokesperson for No 10 said: 'We have listened to MPs who support the principle of reform but are worried about the pace of change for those already supported by the system.
'This package will preserve the social security system for those who need it by putting it on a sustainable footing, provide dignity for those unable to work, supports those who can and reduce anxiety for those currently in the system.
'Our reforms are underpinned by Labour values and our determination to deliver the change the country voted for last year.'
Meanwhile, Kendall wrote to MPs: 'We will ensure that all of those currently receiving PIP will stay within the current system. The new eligibility requirements will be implemented from November 2026 for new claims only.
'Secondly, we will adjust the pathway of Universal Credit payment rates to make sure all existing recipients of the UC health element – and any new claimant meeting the severe conditions criteria – have their incomes fully protected in real terms.'
She said a ministerial review would ensure the benefit is 'fair and fit for the future' and will be a 'coproduction' with disabled people, organisations which represent them and MPs.
'These important reforms are rooted in Labour values, and we want to get them right,' she added.
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While the concessions have been welcomed by some of the rebels - including Hillier - many remain opposed, and look set to vote against the bill on Tuesday.
Scottish Labour MP Brian Leishman said the concessions were "not enough because disabled people will still become poorer".
Brian Leishman (Image: PA) "The Government should withdraw the bill & work with organisations & charities to create a welfare system that looks after people," he wrote on Twitter/X.
"That's the real Labour thing to do."
The new proposals have also been condemned by parties north of the Border, as both the SNP and the Scottish Greens accused Labour of creating a "two-tier" disability system.
Stephen Flynn SNP Westminster leader Stephen Flynn 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."
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Flynn added: 'I was a perfectly fit and healthy kid when I collapsed at school before spending eighteen 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.'
Maggie Chapman (Image: Christian Gamauf) Meanwhile, Scottish Greens MSP Maggie Chapman said the U-turn will still "hurt disabled people".
She said: 'This decision is good news but only for some people. It is testament to the hard work and determination of disabled people and other activists who have been fighting to stop these brutal cuts.
'Starmer might have done a partial U-turn but, instead of creating a fair welfare system for all he's created a two-tier benefits system. New claimants will still be subjected to the new, harsher assessment regime, and will not receive the benefits they need and deserve."
Chapman added that it was "astonishing" that a Labour Government "would ever even contemplate such cruel and inhuman cuts".
She continued: '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.
'These rebels might have saved Starmer's skin this time, but Greens will keep fighting against these dangerous austerity measures from Labour and make the case for Scotland to build a fair social security system that treats everyone with dignity and respect.'