Starmer makes dramatic welfare U-turn to quell Labour revolt

UK Prime Minister Keir Starmer narrowly avoided the most damaging parliamentary defeat of his premiership by performing a dramatic U-turn on proposed cuts to disability and sickness benefits. This came as he faced a potentially disastrous rebellion from within his own Labour Party.

Starmer made last-minute concessions just hours before the Commons vote on the controversial Universal Credit and Personal Independence Payment (PIP) reforms. These concessions ultimately ensured the bill’s survival, but at a significant political and strategic cost.

Despite commanding a commanding majority of 165 MPs in the House of Commons, the scale of internal unrest was enough to shake the foundations of his authority.

Forty-nine Labour MPs voted against the welfare reform bill, the largest rebellion of Starmer’s premiership to date. Starmer’s government managed to push the legislation through with 335 votes to 260, securing a majority of 75. However, this success was achieved only after the core components of the bill were diluted to the point of near impotence.

Concessions to calm the storm

The concessions made to avert a defeat were substantial. The government announced a delay to the proposed benefit cuts, shifting the implementation date to November 2026 and restricting the changes to new applicants only. Existing recipients of PIP and the health element of Universal Credit will be fully protected under the current system.

Furthermore, a ministerial review of the PIP assessment will now take place before any changes are enacted. This review, to be led by Social Security and Disability Minister Stephen Timms, aims to involve disabled people and advocacy groups directly in shaping future reforms. Work and Pensions Secretary Liz Kendall formally outlined these commitments in a letter to MPs, emphasising the government’s intention to “reduce anxiety” and place fairness at the heart of reform.

These reversals, while welcomed by some MPs and disability rights organisations, have severely weakened the fiscal impact of the legislation. The government originally hoped to save £5 billion annually through tighter eligibility rules and reduced benefits. These ambitions have now been halved, with current estimates putting the savings at around £2 billion. It remains unclear what the actual financial yield will be after the delayed implementation and narrowed scope.

Starmer’s leadership under pressure

While Starmer succeeded in winning the vote, the broader political narrative is one of a leader embattled by his party and under mounting criticism for a series of policy reversals. This latest climbdown follows a string of U-turns that have begun to define his first year in office.

Earlier in June, his government reversed plans to scrap winter heating support for pensioners after another intra-party backlash. Days later, Starmer announced a national inquiry into child sexual exploitation — a move he had previously resisted.

The cumulative effect of these reversals has been a steady erosion of Starmer’s personal approval ratings and public perception of his leadership. Pollster John Curtice has cllaed Starmer as the most unpopular newly elected prime minister in modern British history. The YouGov poll released last week showed that Labour is bleeding support not just to the right, with Reform UK rising under Nigel Farage, but also to the Liberal Democrats and Greens on the left.

Critics within Labour have pointed to a growing disconnect between Starmer’s centrist governance and the party’s traditional base. The welfare cuts, in particular, alienated both left-wing MPs and grassroots members, many of whom saw the proposals as antithetical to Labour values.

Paula Barker, one of the MPs leading the opposition, described the attempt to push through the original reforms as “the most unedifying spectacle” she had ever witnessed.

Economic dilemma for Rachel Reeves

The dilution of the welfare reforms poses an immediate problem for Chancellor Rachel Reeves. With reduced savings from the welfare budget, the government will need to identify alternative funding sources to maintain fiscal discipline. Reeves now faces a dilemma of either raising taxes, cut spending elsewhere or consider increasing borrowing — all options she has previously vowed to avoid.

The broader economic context compounds these pressures. The UK economy has been sluggish, with limited signs of growth despite Labour’s promises to rejuvenate it after years of Conservative austerity and Brexit uncertainty. Reeves, once seen as a pragmatic and disciplined steward of public finances, now faces the challenge of patching a budgetary gap without undermining Labour’s credibility or alienating core voters further.

A fractured political strategy

This episode exposes the challenges Starmer faces in balancing competing political pressures. On one hand, he must present Labour as a responsible governing party capable of managing the economy and welfare state. On the other hand, he must retain the support of a diverse coalition of MPs, party members, and voters with strong views on social justice and public spending.

While some MPs, such as Dame Meg Hillier, welcomed the concessions as a positive compromise that protects the vulnerable, others remain unconvinced. Rachel Maskell, representing the party’s left flank, warned that reforms still lacked genuine inclusion of disabled people and dismissed the revised package as a “backroom deal.”

The opposition has been quick to seize on Labour’s internal discord. Conservative Party finance chief Mel Stride described the government as having “ripped the heart” out of its own legislation, while Reform UK leader Farage derided Starmer’s first year in power as a catalogue of political backtracking. Reports suggest that even before the vote, the revised legislation was widely labelled as “farcical” for its incoherence and diluted impact.

Reform with caution

Despite surviving the Commons vote, the episode leaves Starmer politically bruised. His ability to command discipline within his party is increasingly in question, and his reputation as a steady, pragmatic leader has taken a hit. A government that came to power promising stability and competence is now being described by critics — even some within Labour — as reactive and adrift.

The welfare reform saga serves as a cautionary tale about governing with a large majority but a fragmented party. The lesson for Starmer may well be that technocratic efficiency cannot replace the need for clear political values and effective coalition-building within his ranks.

As the ministerial review of PIP unfolds and further economic decisions loom in the autumn budget, Starmer’s leadership will continue to be tested. Whether he can reconcile fiscal pragmatism with Labour’s traditional social commitments remains an open question — and the answer may define not just the rest of his premiership, but Labour’s long-term identity.