Keir Starmer Survives Labour Rebellion After Vicky Foxcroft Resigns; Welfare Bill Passes 335-260 With Concessions, Two-Child Cap Scrapped

Labour MP Vicky Foxcroft resigned as a government whip in June 2025, citing her opposition to the government's proposed welfare reforms, particularly cuts to disability benefits under the Personal Independence Payment (PIP) scheme. Her resignation marked the first frontbencher departure over the welfare bill, signaling deep dissatisfaction within the party. Following this, a major rebellion emerged within the Labour Party, with over 120 MPs, including several select committee chairs, signing a reasoned amendment aimed at blocking the welfare reform bill. The bill sought to implement cuts to disability and sickness benefits, intending to save £5 billion annually by the end of the decade.

Despite the growing internal opposition, Prime Minister Sir Keir Starmer initially vowed to press ahead with the reforms, emphasizing the need to fix what he described as a failing welfare system that traps millions. However, as the rebellion intensified, Starmer and his government entered negotiations with Labour rebels, offering substantial concessions. These included softening the PIP assessment criteria and modifying Universal Credit provisions, which were expected to cost the government several billion pounds over the coming years. In a last-minute move before a crucial Commons vote in early July 2025, the government removed the clause setting out changes to PIP eligibility altogether. This major concession helped the welfare reform bill pass its second reading by 335 votes to 260, narrowly averting a damaging defeat. Despite the watered-down reforms passing, Starmer's leadership faced criticism and was described as weakened by the rebellion and subsequent climbdowns. The government also abandoned plans to scrap the two-child benefit cap, a measure that would have cost £3.4 billion, effectively shelving it amid the political fallout. Starmer maintained that the revised welfare reforms struck the "right balance" and continued to assert the necessity of reforming the welfare system, though the episode highlighted significant challenges within his party and fiscal plans.