Government announces concessions to welfare bill in ‘screeching U-turn’
People who currently receive the personal independence payment (Pip) will continue to do so after the government made concessions to Labour rebels on controversial welfare reforms.
A letter from Work and Pensions Secretary Liz Kendall to MPs said adjustments to universal credit would also see incomes protected.
The announcement comes after crisis talks with backbenchers, with some 126 MPs within the party signing an amendment that would halt the legislation in its tracks.
Sir Keir Starmer’s Universal Credit and Personal Independence Payment Bill has its second reading on Tuesday, the first opportunity for MPs to support or reject it.
A spokesperson for Number 10 said: “We have listened to MPs who support the principle of reform but are worried about the pace of change for those already supported by the system.
“This package will preserve the social security system for those who need it by putting it on a sustainable footing, provide dignity for those unable to work, supports those who can and reduce anxiety for those currently in the system.
“Our reforms are underpinned by Labour values and our determination to deliver the change the country voted for last year.”
‘Another screeching U-turn’
The Government’s original package restricted eligibility for the personal independence payment (Pip), the main disability payment in England, and limited the sickness-related element of universal credit.
Existing claimants were to be given a 13-week phase-out period of financial support in an earlier move that was seen as a bid to head off opposition by aiming to soften the impact of the changes.
The Tories described concessions as “the latest in a growing list of screeching U-turns” from the Government.
Shadow Chancellor Mel Stride said: “Under pressure from his own MPs, Starmer has made another completely unfunded spending commitment.
“Labour’s welfare chaos will cost hardworking taxpayers.
“We can’t afford Labour.”
Change in welfare payments to affect 370,000
The change in Pip payments would protect some 370,000 existing claimants who were expected to lose out following reassessment.
If the legislation clears its first hurdle on Tuesday, it will then face a few hours’ examination by all MPs the following week – rather than days or weeks in front of a committee tasked with looking at the Bill.
The so-called “reasoned amendment” to the welfare bill, tabled by Treasury select committee chairwoman Dame Meg Hillier, had argued that disabled people have not been properly consulted and further scrutiny of the changes is needed.
In her letter, the Work and Pensions Secretary said: “We recognise the proposed changes have been a source of uncertainty and anxiety.
“We will ensure that all of those currently receiving PIP will stay within the current system. The new eligibility requirements will be implemented from November 2026 for new claims only.
“Secondly, we will adjust the pathway of Universal Credit payment rates to make sure all existing recipients of the UC health element – and any new claimant meeting the severe conditions criteria – have their incomes fully protected in real terms.”
She said a ministerial review would ensure the benefit is “fair and fit for the future” and will be a “coproduction” with disabled people, organisations which represent them and MPs.
“These important reforms are rooted in Labour values, and we want to get them right,” she said.
“This is a good deal. It is massive changes to ensure the most vulnerable people are protected… and, crucially, involving disabled people themselves in the design of future benefit changes.”
Other MPs remain opposed to the bill
While the welfare concessions look set to reassure some of those who had been leading the rebellion, other MPs remained opposed before the announcement.
Speaking to the PA news agency before the concessions were revealed, Rachel Maskell said: “As the Government is seeking to reform the system, they should protect all disabled people until they have completed their co-produced consultation and co-produced implementation.
“I cannot vote for something that will have such a significant impact … as disabled people are not involved, it is just a backroom deal.”
One MP said that ministers would need to “go back to the drawing board” to make the Bill acceptable.
Another said they expected the legislation would get through second reading if the Government conceded the key sticking points relating to existing Pip claimants, the health element of universal credit and a policy consultation.
“It would need to be in the Bill, not just a commitment,” they said.
Speaking in the Commons on Wednesday, Sir Keir told MPs he wanted the reforms to reflect “Labour values of fairness” and that discussions about the changes would continue over the coming days.
He insisted there was “consensus across the House on the urgent need for reform” of the “broken” welfare system.
By Rob Freeman and Nina Lloyd, PA