Starmer Dilutes £5 Billion Welfare Plan to Calm Labour Revolt

U.K. Prime Minister Keir Starmer has sharply watered down his flagship welfare-reform bill after the biggest internal revolt of his premiership, with more than 120 Labour MPs threatening to vote against the plan. The rebellion began on 19 June when former whip Vicky Foxcroft quit in protest, and by 24 June a reasoned amendment opposing the legislation had attracted 127 signatories, forcing Downing Street into negotiations.

The original Universal Credit and Personal Independence Payment Bill sought to save about £5 billion a year by tightening eligibility for personal independence payments (PIP) and cutting the health-related top-up to Universal Credit. Critics warned the measures would push 250,000 people, including 50,000 children, into poverty and create a two-tier system for disabled claimants.

On 27 June Work and Pensions Secretary Liz Kendall confirmed a compromise: the tougher PIP rules and the freeze to the health element of Universal Credit will apply only to new claimants from November 2026, while existing recipients will see payments rise at least in line with inflation. Downing Street also promised a £300 million employment-support package and commissioned Disabilities Minister Stephen Timms to lead a co-produced review of PIP assessments. Independent analysts estimate the concessions cut expected savings to about £2 billion annually, and updated government modelling still forecasts 150,000 additional people in relative poverty by 2030.

Despite the retreat, Labour whips say around 50 MPs remain prepared to oppose the bill at its second-reading vote on Tuesday. Starmer, who insists the changes “strike the right balance,” is continuing talks over the weekend, but the episode has highlighted tensions between his fiscal pledge to curb welfare spending and the party’s traditional support for social security.