UK's Starmer waters down welfare cuts to quell Labour revolt

Japan Today

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FILE PHOTO: British Prime Minister Keir Starmer looks on during his meeting with the Crown Prince of Bahrain, Prince Salman bin Hamad Al Khalifa (not in picture), at 10 Downing Street, London, Britain June 19, 2025. Jordan Pettitt/Pool via REUTERS/File Photo
By Andrew MacAskill and Elizabeth Piper
British Prime Minister Keir Starmer sharply scaled back planned welfare cuts on Friday to quell a rebellion by lawmakers in his governing Labour Party, the latest U-turn to dent his authority just a year after winning power.
Planned changes to make it tougher to collect some disability and sickness benefits would now apply only to new applicants, while the millions of people who already rely on the benefits will no longer be affected, the government said.
The reforms had sought to shave 5 billion pounds ($7 billion) per year off Britain's rapidly rising welfare bill.
However, more than 100 lawmakers from the Labour Party, which founded the state-run National Health Service and sees itself as the protector of the welfare state built after World War Two, had publicly opposed the cuts.
The revolt had meant Starmer faced a potential defeat in a vote on the changes in parliament next week - a year after he won a landslide majority in a national election.
Starmer said there was no other option to pressing ahead with reform of the welfare system "because it doesn't work and it traps people", but after listening to lawmakers, "getting that package adjusted ... is the right thing to do".
"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," he told reporters, defending the concessions as a "common sense" solution.
In a letter to lawmakers, work and pensions minister Liz Kendall confirmed that only new claimants would be subject to the planned tightening of eligibility.
Labour lawmaker Meg Hillier, who chairs an influential parliamentary committee and had spearheaded the efforts to water down the bill, welcomed the government's move as "a good and workable compromise".
U-TURN
The government did not set out the cost of the change in policy. Care minister Stephen Kinnock said that details would come in the next budget, which is due in the autumn.
Ruth Curtice, chief executive of think tank Resolution Foundation and a former senior finance ministry official, said the compromise would reduce the government's savings by around 3 billion pounds a year.
A spokesperson for Starmer said details of the plan would be set out before the vote on Tuesday, but "these changes will be fully funded, there will be no permanent increase in borrowing". The spokesperson declined to comment on possible tax rises.
It was the third big U-turn for Starmer's government, following a reversal in unpopular cuts to payments to pensioners for fuel to heat homes in the winter, and a decision to hold an inquiry into the authorities' response to gangs that groomed girls for sex, after having said no such inquiry was needed.
Starmer has argued that Britain's disability benefits system is too costly to sustain, and makes it too difficult for people who can work to do so, by penalising them for their earnings.
Campaigners said that even if existing claimants were exempt, the changes would still harm too many people. Disability UK, a charity, said it rejected a "two-tier system" that would deny new claimants benefits that existing claimants receive.
"It is not a massive concession to have a benefit system where future generations of disabled people receive less support than disabled people today," said Mikey Erhardt, the group's policy lead.
The opposition Conservative Party's work and pensions policy chief, Helen Whately, said on X the decision was humiliating for Starmer, and represented a missed opportunity to cut the welfare bill while "leaving taxpayers to pick up the bill".
Annual spending on incapacity and disability benefits already exceeds Britain's defence budget and is set to top 100 billion pounds ($137 billion) by 2030, according to official forecasts, up from 65 billion pounds now.
© Thomson Reuters 2025.