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Watering down the government’s flagship welfare changes will cost taxpayers £2.5bn, work and pensions secretary Liz Kendall admitted on Monday, as official estimates showed the revised measures will still push 150,000 people into poverty.
Setting out the details of concessions offered to rebel Labour MPs to prevent them voting down the bill — including that tighter eligibility criteria for disability benefits will only apply to new claimants — Kendall admitted the original pace of change had been too fast.
“There have also been real concerns . . . we have listened carefully and we are making positive changes as a result,” she told the House of Commons.
But she defended the attempt to get to grips with Britain’s spiralling welfare budget to make it “sustainable” for future generations.
Talks are still ongoing between whips and Labour MPs, although further concessions before Tuesday’s vote are unlikely, according to people briefed on the discussions. Ministers had been braced for a rebellion of 126 MPs, which is now expected to shrink to around 50 — not enough to overcome the government’s majority.
The Conservatives said they would vote against the bill, even though Tory leader Kemi Badenoch described the welfare budget as “out of control”. The rebels would need to reach 83 MPs to defeat the government alongside opposition parties.
Ministers still expect to see the biggest rebellion of Starmer’s premiership, eclipsing the 16 who opposed the planning and infrastructure bill earlier this month.
Tony Blair’s biggest rebellion in his first year involved 47 backbenchers, according to Philip Cowley, politics professor at Queen Mary University.
Some Labour MPs also remained highly critical. Marie Tidball, the MP for Penistone and Stocksbridge and a disability rights campaigner, complained that the people most affected had not been properly consulted on the reforms.
“Having no public consultation on these plans excludes the voices of disabled people . . . This makes disabled people worse off,” she said.
Modelling by the Department for Work and Pensions published on Monday showed around 150,000 people will still be pushed into poverty by 2030 because of the planned welfare cuts — compared with 250,000 under the original proposals.
However, the modelling did not include any “potential positive impact” from extra funding and measures to support people with disabilities back into work.
Some MPs have welcomed Starmer’s concessions but critics say they risk creating a “two-tier” welfare system where people who become disabled after the reforms take effect could lose out.
Shadow work and pensions secretary Helen Whately told the Commons that the changes mean that “two people diagnosed with Parkinsons a week apart will now get different levels of support”.
The new details came alongside a written statement by Sir Stephen Timms, disabilities minister, setting out the terms of reference for a comprehensive review of personal independence payments, or “Pip”, which will not be completed until after the new changes are law.
Sarah Owen, Labour chair of the Commons women and equalities committee, said there was no “logic” to the timing, which she warned would lead to even more discrepancies in the system.
Labour officials admitted that MPs needed to be “reassured” on that point and suggested that recommendations made by the Timms panel could be applied retrospectively.
Downing Street said it was confident that creating a two-tier benefits system for new and existing claimants was legal. Kendall said it was common for existing claimants to be kept on old welfare measures once they were reformed.
Some people still receive the “severe disablement allowance” that was abolished in 2001, while many others are on the disability living allowance that was replaced by Pip in 2013, she said.
The prime minister has argued the reforms are essential to stop the welfare budget rising ever higher, but the changes will reduce the savings for the government from almost £5bn to about £2bn-£2.5bn.
Combined with a previous U-turn on winter fuel payments for pensioners, chancellor Rachel Reeves has been left with a hole in her budget of close to £4bn — for which taxes may need to rise.
Changing the actual text of the welfare 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 later.
