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Labour heads for showdown as concessions fail to quash welfare rebellion
  • Finance Expert

Labour heads for showdown as concessions fail to quash welfare rebellion

  • June 29, 2025
  • Roubens Andy King
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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The UK government has refused to say it is confident of winning its key welfare reform vote this week, as a significant number of rebel MPs are still threatening to try and kill the bill, arguing that ministers’ concessions do not go far enough.

Wes Streeting, health secretary, said on Sunday the government was “in a better position” with its MPs after watering down changes to disability welfare reforms, but stopped short of saying it was confident it had the numbers after more than 120 Labour MPs threatened to rebel against the legislation.

The government has a working majority of 165 meaning about 80 Labour MPs would probably need to vote against the bill to defeat it, depending on abstentions and presuming the other parties oppose it.

“We’re in a much better position than we were last week,” Streeting told the BBC on Sunday morning, but conceded there was still “a lot of trust that needs to be rebuilt”.

The vote on Tuesday has become a key test for Prime Minister Sir Keir Starmer as he approaches the first anniversary of his time in office.

Starmer moved to soften reforms last week after the government looked set to lose the vote despite its huge majority. 

The government’s changes to the bill — including vowing not to take disability benefits away from people already receiving them — were seen as a significant U-turn by Starmer. Critics have said it risks creating a “two-tier” welfare system with people that become disabled after the reforms risking losing out.

Starmer has argued reform is essential to stop the welfare budget spiralling ever higher, but the changes will reduce the savings for the government from almost £5bn to about £2bn. Combined with an earlier U-turn on winter fuel payments chancellor Rachel Reeves has been left with a £4.25bn hole in her budget.

A number of rebels said they are now prepared to back the bill but dozens are understood to be holding out, with many taking the weekend to think about their options.

A spokesperson for Downing Street declined to say if the government was “quietly confident” when asked, but pointed towards the fact a number of leading rebels had now agreed to back the vote after the concessions.

It said the picture would become clearer on Monday after ministers set out the terms of reference for the so-called Timms Review into disability benefits.

But to be so close to a potentially defining vote for the government without a clearer picture of the outcome is highly unusual, and points to the tensions and bad blood within Labour.

A government official said they were having “good conversations” with MPs about the changes to the bill.

“The Timms Review will ensure we protect the most vulnerable, get those that want to work back into work and maintain a sustainable welfare system for the future,” they said. “This is important to all Labour MPs.”

On Monday, the work and pensions secretary Liz Kendall is due to make a statement to the House of Commons confirming the government’s planned changes to the reforms and laying out a review of the benefits with disability charities.

Changing the actual text of the bill at this stage is not possible, so MPs are being asked to take the ministerial statement as a promise that changes will be enacted at the next reading.

Paula Barker, Labour MP for Liverpool Wavertree who helped organise the rebellion against the bill, said that while it was “unquestionable” a number of opponents had been won over by the government “there are still many who will still vote against”.

“Some colleagues are waiting to hear what the minister says tomorrow,” Barker said. “The key issue is whatever written ministerial statement is tabled it won’t be on the face of the bill and trust is at an all-time low.”

MP Louise Haigh, one of the leading rebels, said on Sunday that she would now vote for the bill, arguing that a “significant number of concessions” had been made, but said the government had to learn from the crisis.

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“I think this week’s crisis has been precipitated by a sense we weren’t being listened to . . . but the PM has accepted that a different approach needs to be taken and this is an opportunity to learn serious lessons,” Haigh told the BBC.

“There have been issues with both the economic policy and the political strategy that’s what drove so many colleagues to take this unprecedented step,” she added.

The Unite union, one of Labour’s biggest financial backers, on Saturday called on the government to scrap the bill with general secretary Sharon Graham calling it “divisive and sinister”.

“The government needs to drop its entire welfare bill and start again with the principle of social justice and helping people into work at its heart,” Graham added.

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