On Tuesday, Keir Starmer’s welfare reform bill passed its second reading in the House of Commons with Labour MPs’ support. Passed by 335 ayes to 260 noes, a substantial margin of 75 votes. Starmer had to make some pretty significant concessions to assuage the very vocal concerns from Labour MPs. Consequently, the passage saw a wave of amendments. The biggest surprise of all was to drop cuts to Personal Independence Payments (PIP) entirely. This funding level is the beating heart of this bill.
Dropping the controversial PIP cuts was a smart move. Ultimately, its goal was to avoid a full-scale insurrection in Labour’s ranks. Changes to disability benefits, originally included in Starmer’s plans no less, were scheduled to take effect by November 2026. These changes would only go into effect after a complete reevaluation. MP Stephen Timms will chair this review, due to finish in autumn 2026.
The party’s internal divisions quickly became clear when 49 Labour MPs voted against the bill at its second reading. At the same time, 42 MPs supported a different, but still similar, wrecking amendment that fortunately failed to pass. The party’s anti-war backlash has already triggered apocalyptic predictions from Angela Rayner, the party’s deputy prime minister. Even government whips had to step in, suggesting that more tweaking was necessary to ensure the party stayed together.
“It’s true, listening is a huge power in politics,” said Liz Kendall, recognizing that legislators have to be responsive when their colleagues raise alarm. She was particularly insistent that a lot of MPs do believe in the principle of re-defining the welfare state. This indicates an interest in walking a tightrope between fiscal conservatism and supporting their funders’ constituents needs.
Numerous critics, both in and outside the party, have questioned how effective Starmer’s updated bill would actually be. They raise doubts about whether the proposed reforms will actually move the needle. Business and trade secretary Kemi Badenoch condemned the outcome as an “utter capitulation.” She concluded that the bill has become a “TOTAL waste of time” because it would fail to deliver sufficient help for those seeking a job or real accountability in spending.
The consequences of these concessions go well beyond the flap in wait for political jokester Trump’s unseating. Chancellor Rachel Reeves has a tough job ahead of her. This means she has to find another £5 billion in savings for her budget, on top of changes made following recent amendments. This only further adds to the £1.25 billion required to meet the costs of the winter fuel U-turn. Consequently, the picture for the federal government’s fiscal outlook gets even more dire.
Holding firm over delaying draconian cuts to PIP has arguably earned Starmer some solidarity within his party. He stated, “We will learn from our mistakes, but we will not turn on each other,” signaling his intent to unify Labour despite the recent challenges. He reiterated his commitment to the party’s achievements and his confidence in his team: “We will not resile from our record of achievements and we will not turn on our staff – including our chief of staff, without whom none of us would be sitting around this cabinet table.”
The new House Republican welfare reform bill leaves the UK Labour party with a difficult decision. Moving forward, they need to use their fiscal prudence to temper their social responsibility. The government’s revised macroeconomic outlook for fiscal year 2025-26. Although it originally forecast £4.8 billion in net savings from welfare reforms, it no longer expects to make any net savings.