After months of political pain, after all the arguments with Labour MPs that cutting the welfare bill was a moral and economic necessity, it went up in a puff of smoke on Tuesday afternoon.
At the last minute the Government abandoned any change to the eligibility to claim Personal Independence Payments (PIPs). Instead, that will be subject to a review, rather than kicking in next autumn.
Instead, the Government took a wrecking ball to its own legislation, leaving Chancellor Rachel Reeves with another £2.5bn to find in her autumn budget, on top of the £1.5bn from the U-turn on winter fuel payments
The Government had originally planned to tighten daily living assessments for future claimants, including questions about everyday tasks, with each scored from zero (for no difficulty), to 12 (for the most difficulty). Under the scheme, those who need help to wash their hair, for example, would score two points, but those who are less able and need help to wash between the shoulders and waist would score four points. Critics argue this would mean people with challenges across daily living but without a single dominant condition, would lose out.
All afternoon party managers had grappled with the very real threat of Prime Minister Sir Keir Starmer losing the vote. The jeopardy attached to a defeat cannot be understated. For a government that was propelled into power with a massive 165-seat majority almost exactly a year ago the threat to the Prime Minister’s authority was brought sharply into relief; no prime minister has seen a bill fail at a similar stage since 1986.
The economic implications of a defeat would have been even worse. The international money markets would no longer take anything Reeves says about fiscal restraint seriously, knowing she was a slave to the spendthrifts in her party. But now the Government looks absurd; in hock to its backbenchers, with real questions over party discipline and any further spending cuts. In the end 42 Labour MPs voted for the wrecking amendment, even though the filleted bill was later passed.
“Most of us are aware that the dog’s breakfast of this Bill is being driven by the need to get four points to the OBR [Office for Budget Responsibility] to enable it to be scored for the Budget,” she added.
Labour MPs don’t diss the OBR for the same reasons the Tories did; former Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng are too recent in living memory to show what happens when you disregard fiscal rules. But they do ask why Reeves and her team rely so heavily on the watchdog to decide which policies are credible without proper regard for the reasons Labour MPs went into Parliament in the first place; to put vulnerable people first.
Against the paltry £9.9bn of “headroom” the Chancellor allowed herself against her fiscal rules in her Spring Statement in March, tax rises seem inevitable to fill the gap.
square NEWS How your MP voted on plans to reform welfare and cut benefits
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The events of the last week at Westminster have shown that Labour MPs are fundamentally disinclined to support new spending cuts to help Reeves balance the books. The Chancellor has only just finished an unwelcome three-year Spending Review, in which day-to-day spending by government departments will rise by just 1.3 per cent in real terms from 2026 onwards. Deputy Prime Minister Angela Rayner is the de-facto leader of the Labour MPS advocating for higher taxes on the wealthy rather than cutting services and benefits for ordinary voters, while there is a rump of the party who still think Reeves should break her fiscal rules and borrow more.
The Labour MP for Blyth and Ashington Ian Lavery said the constant flip-flopping over the policy meant the bill was no longer fit for purpose. “This is crazy, man,” the Northumberland MP told the Commons before the votes. Man not wrong.
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Finally We wish PressBee provided you with enough information of ( It’s hard to overstate what an absolute shambles this is for Labour )
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