Labour welfare rebels have threatened to set up a rival party if Keir Starmer kicks them out for voting against his plan to cut benefits.
Senior ministers including Deputy PM Angela Rayner have refused to rule out stripping party MPs of the whip if they oppose changes to payments for disabled people.
The package of reforms is aimed at encouraging more people off sickness benefits and into work, but dozens of Labour rebels said last month that the proposals were ‘impossible to support’.
Some 170 are said to have raised concerns, meaning it is possible it will be the largest rebellion of Sir Keir’s time in power so far.
They are unhappy at the hard line emanating from No10 with threats of being suspended, with one telling Politico: ‘You can’t do that to 170 MPs, we’ll just go off and form Labour 2.
It came after a government whip resigned in order to oppose the change. Vicky Foxcroft, who was shadow disability minister between 2020 and 2024, said in a letter to the Prime Minister she could not vote ‘for reforms which include cuts to disabled people’s finances’.
However Culture Secretary Lisa Nandy this morning claimed talk of a massive rebellion was overblown.
She said a ‘handful’ of backbench MPs had expressed concerns to her about the ‘detail’ of the Bill, but added she was confident the Government had listened and the package of reforms was ‘absolutely right’.
‘It would be wrong to say that when you bring forward big reforms, there aren’t concerns and there aren’t dissenting voices, of course there are. But Vicky is the only frontbencher that I’ve had a conversation with about resigning,’ she told BBC Breakfast.
Ms Foxcroft is the first Labour frontbencher to stand down over the proposed benefit cuts ahead of an expected showdown in Parliament next month, where a number of MPs are expected to try to block the reforms.
The Lewisham North MP accepted ‘the need to address the ever-increasing welfare bill’ but did not believe the proposed cuts ‘should be part of the solution’.
‘I have wrestled with whether I should resign or remain in the Government and fight for change from within. Sadly it is now seems that we are not going to get the changes I desperately wanted to see,’ she added.
The changes have been set out in the Universal Credit and Personal Independence Payment Bill, which was published on Wednesday and is due to be voted on in Parliament on July 1.
They are intended to trim around £5 billion from the total benefits bill, with Work and Pensions Secretary Liz Kendall saying they would bring ‘compassion’ and ‘dignity’.
Keir Starmer has insisted he will not bow to pressure to water down the curbs on sickness and disability benefits, despite fears there are dozens of backbenchers are ready to rebel.
The welfare reforms are set to include the tightening of criteria for the main disability benefit in England, personal independence payment (Pip).
Pip is a benefit aimed at helping with extra living costs if someone has a long-term physical or mental health condition or disability and difficulty doing certain everyday tasks or getting around because of their condition.
The latest data, published on Tuesday, showed 3.7 million people in England and Wales claimed Pip, up from 2.05 million in 2019, with teenagers and young adults making up a growing proportion of claimants.
Around 800,000 people are set to lose out on the benefit under the Government’s proposals, according to an impact assessment published alongside Wednesday’s legislation.
However, this also suggests the numbers claiming Pip or Disability Living Allowance will increase 750,000 by the end of the Parliament even after the reforms.
Ministers also want to cut the sickness related element of universal credit, and delay access to it, so only those aged 22 and over can claim it.
The package of reforms is aimed at encouraging more people off sickness benefits and into work, and the Government hopes it can save up to £5billion a year by doing so.
That is essential for Rachel Reeves’ efforts to balance the books, although the overall benefits bill would still be increasing.
However, Labour MPs have warned the proposals will ‘destroy lives’ and are ‘impossible to support’.
Labour MP Bell Ribeiro-Addy said the scale of the cuts ‘would have made George Osborne blush’.
She added: ‘We cannot underestimate their human and political cost. The public will not forgive us if we remove support from those most in need of it.’
Fellow Left-winger Richard Burgon said: ‘These cruel cuts will drive hundreds of thousands of people into poverty. These cuts should have been dropped – now they should be voted down.’
More than 100 Labour MPs have raised concerns about the proposals with party whips, but ministers are privately confident they can avoid a humiliating defeat in the Commons early next month.