Starmer Waters Down £5 Billion Welfare Plan After Biggest Labour Rebellion

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Updated Jul 6, 2025, 11:06 AM

A revolt over welfare policy erupted on 19 June when Labour MP Vicky Foxcroft resigned as a government whip, declaring she could not support Prime Minister Keir Starmer’s plan to reduce disability benefits. Her departure signalled growing disquiet about a Welfare Reform Bill designed to curb the fast-rising cost of incapacity and sickness payments.

Opposition inside the governing party escalated quickly. By 24 June more than 120 Labour backbenchers had signed an amendment aimed at killing the legislation. Although Starmer initially vowed to “press ahead”, Downing Street opened negotiations and, on 26 June, promised that tighter eligibility criteria for Personal Independence Payment (PIP) would apply only to future claimants and would be subject to further consultation. The climbdown cut projected annual savings from roughly £5 billion to nearer £2 billion.

With defeat still possible, ministers offered an eleventh-hour retreat on 1 July, removing the contested PIP clause until an independent review reports. The bill then passed its second reading by 335 votes to 260, but 49 Labour MPs rebelled—the largest revolt of Starmer’s premiership—underscoring strains within the party despite its 165-seat majority.

The concessions blow a multibillion-pound hole in Chancellor Rachel Reeves’s fiscal plans and have cast doubt on other welfare pledges; officials now say a £3.4 billion proposal to scrap the two-child benefit cap is “dead in the water”. Work and Pensions Secretary Liz Kendall conceded that the episode offers “lessons to learn” as critics warn the government’s authority has been weakened even as the watered-down reforms advance.

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#Labour #Vicky Foxcroft #Keir Starmer #Welfare Reform Bill #Starmer #Downing Street #Personal Independence Payment #PIP #Rachel Reeves #Work #Pensions #Liz Kendall

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Richard Burgon MP

@RichardBurgon

MPs will still vote this week on cutting in half vital support for sick and disabled people, despite the recent concessions. The cut to the UC Health Element slashes £2 BILLION from low-income sick and disabled people. My Amendment would stop this. Ask your MP to back it.