Keir Starmer was humbled tonight as his own MPs forced him to gut the government’s £5billion welfare reform legislation to survive a crunch vote.
In 12 hours of carnage at Westminster, the PM’s carefully-assembled truce with rebels dramatically disintegrated.
Facing the threat of a massive revolt, Sir Keir opted make yet another major concession just 90 minutes before the vote.
Ministers pledged that changes to disability handouts will not be finalised until after a review – meaning that the package as it stands will actually make the current system more expensive than before.
Sir Keir – who is days away from marking the first anniversary of his election landslide – had already agreed that the benefits curbs would only apply to new claimants.
There was mocking laughter in the chamber as Social Security Minister Stephen Timms was asked how much the proposals would save now, and merely replied that the government would ‘set out figures in the usual way’.
Despite the humiliating manoeuvres, when the vote was held 44 Labour MPs still backed the fatal amendment and others abstained – although it was comfortably defeated by 328 to 149.
Shortly afterwards the Bill cleared second reading stage by 335 to 260, majority 75. It will now be scrutinised at committee.
A clearly crestfallen Work and Pensions Secretary Liz Kendall tried to put a brave face on the shambles afterwards, acknowledging there were ‘lessons to be learned’ but the party was ‘100 per cent’ behind the PM.
‘I think people are 100 per cent behind a Prime Minister that secured the first Labour Government in 14 years,’ she said.
As panic gripped No10 with the vote looming, Sir Stephen took to the despatch box to promise that changes to Pip eligibility would not be finalised until a review involving disability charities completes in the Autumn next year. They are due to take effect in November 2026.
‘We have heard those concerns, and that is why I can announce that … we will move straight to the wider review, sometimes referred to as the Timms review, and only make changes to Pip eligibility activities and descriptors following that review,’ he said.
‘The Government is committed to concluding the review by the autumn of next year.’
Despite being titled the Universal Credit and Personal Independence Payment Bill, the legislation now contains no measures relating to Pip.
The respected IFS think-tank said that accounted for £2.6billion of the savings the government had hoped for by 2029-30. Curbs to the health element of Universal Credit should have eased spending by £1.7billion, but that was due to be offset by £1.8billion on raising the basic rate.
Researcher Tom Waters said that left an additional cost of £100million by 2029-30.
Agonisingly for Chancellor Rachel Reeves, the delay almost certainly means the Office for Budget Responsibility cannot ‘score’ the savings in time for her Budget.
As a result the black hole in the government’s books is likely to be even bigger than feared. Concerns were already running high that Ms Reeves will have to hike taxes to stabilised the public finances.
The volte face ahead of the 7pm vote caused bemusement in the Commons, with rebel Andy McDonald asking: ‘What are we supposed to be voting on tonight?’
Worryingly for Sir Keir there are also signs of jostling among senior Labour figures touted as potential replacements.
Deputy PM Angela Rayner was said to have brokered the last-ditch deal that staved off defeat.
And London Mayor Sadiq Khan said afterwards: ‘I’ve had serious concerns about the impact of the Government’s welfare reforms on hundreds of thousands of disabled and vulnerable Londoners.
‘I’m pleased that the Government has started to listen and take on board what disability groups, campaigners and others have been saying about the damaging impact of this bill.’
It came after Labour MPs spoke in their droves against the ‘Dickensian’ plan to make it harder to claim PIP or Universal Credit health elements.
Concessions had already reduced the planned savings from £5billion to £2.5billion by the end of the decade.
But MPs were angered by DWP estimates suggesting that would still push 150,000 more people into poverty by 2030.
Cabinet sources told this morning they expected the result would be ‘tight’ – even though no government has lost a piece of legislation at second reading stage since 1986.
In the end it was the biggest revolt of Sir Keir’s premiership, but well short of the 130 who had openly threatened to defy the PM before the climbdowns.
That would have been enough to overturn the government’s massive majority of 166.
Tory leader Kemi Badenoch said: ‘This is an utter capitulation. Labour’s welfare bill is now a TOTAL waste of time.
‘It effectively saves £0, helps no one into work, and does NOT control spending. It’s pointless.
‘They should bin it, do their homework, and come back with something serious.’
She had earlier accused ministers of being ‘driven not by principle but by panic’, joking that Work and Pensions Secretary Liz Kendall ‘looks as if she is being tortured’.
Sir Keir gathered Cabinet to take stock of the grim situation this morning, telling his top team the reforms were ‘designed to help those who can work into employment and ensure dignity and security for those who can’t work’.
Speaking in the chamber Ms Maskell said: ‘These Dickensian cuts belong to a different era and a different party. They are far from what this Labour Party is for: a party to protect the poor, as is my purpose, for I am my brother’s keeper.
‘These are my constituents, my neighbours, my community, my responsibility, and I cannot cross by on the other side.’
Ms Maskell said she had spoken to a constituent who had felt suicidal discussing the cuts, and told colleagues she felt a duty to protect the disabled.
She said: ‘I will fight for the purpose of politics, for their livelihoods and their lives. It is a matter of conscience, deep conscience for me to ensure that these precious people are treated for once with dignity.’
She added: ‘So at this 11th hour I plead, withdraw. We will be met with relief and praise. Let’s consult, co-produce, incorporate the Mayfield Review findings and accommodate the Timms Review first.’
Another rebel ringleader, Debbie Abrahams, said a promised review of the system had not been honoured by the government.
The Work and Pensions Committee chair told the House there was ‘clear confusion’ on the review and whether it would be ‘co-produced with disabled people and their organisations’.
Referring to the proposed requirement for new Pip claimants to score at least four points on at least one daily living activity, Ms Abrahams said: ‘And therein lies the problem – 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.’
Former frontbencher Rebecca Long-Bailey said the government must ‘pull back from the brink’.
‘The sad thing is, is that there are alternatives: introduce higher taxes on extreme wealth; end the stealth subsidies for banks; tax gambling fairly and properly. The list of alternatives is endless,’ she said.
Ms Kendall said welfare reform ‘is never easy, perhaps especially for Labour governments’.
The Work and Pensions Secretary told the Commons: ‘Reviewing the assessment as a whole, let me just say, it is a major undertaking that will take time to get right, especially if we co-produce it properly.
‘It will be for those involved in the review to determine the precise (timetable), but we are absolutely committed to moving quickly and completing the review by next autumn.
‘And I want to assure the House, any changes following the Timms review will be implemented as soon as is practicably possible via primary or secondary legislation.
‘And once we have implemented changes from the review, any existing Pip (personal independence payment) claimant can ask for re-assessment.
‘Welfare reform, let’s be honest, is never easy, perhaps especially for Labour governments. Our social security system directly touches the lives of millions of people and it is something we all care deeply about.
‘We have listened to the concerns that have been raised to help us get these changes right. The Bill protects people already claiming Pip, it protects in real terms the incomes of people already receiving the UC (universal credit) health top-up from that benefit and their standard allowance, and it protects those with severe lifelong conditions who will never work, and those near the end of their life as we promised we would.’
She said she had no fear in voting down the Bill and felt a ‘moral duty’ to ‘speak up for’ disabled people.
‘Yes, I support getting disabled people into work where they’ve been discriminated and dismissed, of course that’s important, but when those people can’t work or need longer to prepare for work, it is vital we don’t remove their lifeline,’ she said.
‘Or else they’ll disappear further and further into the margins.’
Ms Reeves defended the government’s record on helping people in poverty earlier today.
‘The Government is committed to ensuring that there are fewer sick and disabled people in poverty by helping them into work and getting them off NHS waiting lists,’ she said during Treasury questions in the Commons.
‘That is why at the spring statement, we announced the largest investment in employment support in at least a generation. The Government has already taken action to tackle poverty including with the fair repayment rate, which lowers the cap on deductions in universal credit.
‘And we’ve increased the national living wage by 6.7 per cent.
‘Beyond this, we’re investing to reduce poverty by expanding free school meals, investing in a £1 billion settlement for crisis support, and we’ll be setting out our child poverty strategy in the autumn. We’ve invested £29billion in reducing NHS waiting lists, and since taking office, there are 385,000 more people in work.’