Starmer refuses to rule out tax rises as he defends welfare reform bill after ‘humiliating’ climbdown

The legislation cleared its first hurdle on Tuesday by 335 votes to 260, majority 75, after significant concessions to rebel MPs.

Sir Keir Starmer was forced to abandon a key plank of his welfare reform package in the face of a massive rebellion which saw over 120 MPs vouch to vote against the bill.

But the heavily watered down bill, which was supposed to save the government £4.8 billion per year, is now expected to deliver any 'net savings' by 2029/30, leaving the government with a £5bn black hole in their spending plans.

It has led to heavy speculation that the government will have to raise taxes to balance the books, which Starmer has now refused to rule out.

"That Bill will achieve nothing. It is a pointless waste of time and is absolute proof that he doesn't have a plan," Tory leader Kemi Badenoch said during Prime Minister's Questions.

"Let me tell the House what's going to happen: in November, the Chancellor (Rachel Reeves) is going to put up our taxes to pay for his incompetence. We on this side of the House know that you can't tax your way to growth, but people out there are frightened," she added.

Mrs Badenoch later asked: "Can he reassure them by ruling out tax rises in the autumn budget?"

Sir Keir replied: "She knows that no Prime Minister or Chancellor ever stands at the despatch box and writes budgets in the future. That isn't what they did, and it isn't what we do, and she knows it."

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He accused the Tories of having presided over "stagnation, and that is what caused the problems".

The heavily amended bill will cause a headache for the Chancellor, Rachel Reeves, who has vowed not to raise taxes as part of her self-imposed fiscal rules.

She appeared to be crying on the front benches next to the Prime Minister during PMQs after Badenoch asked about her future.

The Leader of the Opposition said Reeves looked "absolutely miserable" and challenged the Prime Minister to say whether the Chancellor would keep her job until the next election.

Sir Keir dodged the question, saying Badenoch "certainly won't".

The bill scraped through Parliament after a last-minute concession was offered to rebel Labour MPs with just an hour to go before the vote.

Cuts to Personal Independence Payments - commonly known as PIP - will now not take place until after a review.

The decision to remove key parts of the Bill is remarkable for a Government with a working majority of 165 and after just under a year in office.

But Sir Keir defended what was left of the welfare reform package at PMQs, telling MPs it will be "better for individuals, better for the taxpayer and better for the economy".

Conservative leader Kemi Badenoch said: "It's been a difficult week for the Prime Minister. So let's start with something simple. Can the Prime Minister tell the House how much his welfare Bill is going to save?"

The PM replied: "What we delivered last night was a Bill which ends mandatory reassessment of those with severe disabilities, that is the right thing to do. It re-balances Universal Credit, that is long overdue. And it sets out a pathway to reform of Pip (personal independence payment).

"It's consistent with the principles I set out throughout. If you can work, you should work. If you need help into work, the state should provide the help. The system that they broke doesn't do so."

He added: "If you can't work, you must be supported and protected. The reformed welfare system that we're putting place will be better for individuals, better for the taxpayer, and better for the economy."

Richard Burgon, Labour MP for Leeds East, says that the bill should have been pulled and amendment

He told LBC's Aggie Chambre that Labour MPs have been "treated like mugs- they've been asked to vote for a bill, unamended, to save political face."

Mr Burgon continued: "This bill still contains billions of pounds of cuts for disabled people. It's not a good day for the Labour party.

"This is the winter fuel bill x100. This does not pass the test of 'can you explain it to your constituents?"

Rachel Maskell, the Labour MP for York Central, said a number of her colleagues had been "bullied" into passing the bill, leaving them "deeply distressed".

The claims were not qualified, nor any detail provided. Labour said they reject the premise and it is not something they recognise. They said the claims were "unsubstantiated".

Mother of the House Diane Abbott, Stella Creasy (Walthamstow), Rebecca Long Bailey (Salford) and Brian Leishman (Alloa and Grangemouth) were among the 49 Labour MPs who unsuccessfully tried to block the welfare reform Bill at second reading.

Josh Fenton Glynn Labour MP for Calder Valley, who voted for the bill, told LBC: "I was prepared to vote against the government as I was really concerned.

"They changed enough that I felt confident the new bill will help sort out the system."

Mr Fenton Glynn said he changed his mind when it became "clear the government was listening" and did not make changed to the personal independence payment (PIP).

Another supporter, Sadik Al-Hassan, Labour MP for North Somerset, said: "The negative aspects of the bill have been stripped out."

The Government shelved plans to restrict PIP and any changes will now only come after a review of the benefit.

The climbdown came just 90 minutes before MPs were due to vote for the first time on the Universal Credit and Personal Independence Payment Bill.

Postponing any changes to the eligibility criteria for Pip means it is now uncertain how much the reforms will save from the soaring welfare bill.

Tory leader Kemi Badenoch accused ministers of "utter capitulation" and said the legislation was now "pointless".

She said: "They should bin it, do their homework, and come back with something serious. Starmer cannot govern."

Mayor of London Sadiq Khan said: "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’s important that ministers look again at changing eligibility for PIP. Disabled Londoners rely upon this vital safety net.

“I have always said that more must be done to support those who are able to work to be able to do so. The Government must now be true to their word and engage meaningfully with disabled groups and charities about any proposed changes to welfare eligibility.

"The concerns of disabled people, who have been frightened and anxious since these plans were first announced, mustn’t be treated as an afterthought, but be central to how reforms are designed.”

Earlier, a Labour rebel attempt to halt the legislation was defeated by 179 votes.

A previous effort to kill the Bill had attracted more than 120 Labour supporters, but was dropped after the first partial U-turn on the legislation last week, which restricted the Pip changes to new claimants from November 2026.

That date has now been abandoned in the latest climbdown, with any changes now only coming after disability minister Sir Stephen Timms' review of the Pip assessment process.

Sir Stephen announced the climbdown in the middle of the debate on the legislation.

He acknowledged "concerns that the changes to Pip are coming ahead of the conclusions of the review of the assessment that I will be leading".

He said the Government would now "only make changes to Pip eligibility activities and descriptors following that review", which is due to conclude in the autumn of 2026.

The concession came after frantic behind-the-scenes negotiations in Westminster involving the Prime Minister, his Cabinet and wavering Labour MPs.

Charlotte Gill, head of campaigns and public affairs at the MS Society, said: "We thought last week's so-called concessions were last minute. But these panicked 11th hour changes still don't fix a rushed, poorly thought-out Bill."

But Jon Sparkes, chief executive of learning disability charity Mencap, said: "The last-minute change relating to the review Sir Stephen Timms is leading sounds positive and we are pleased that the Government has listened."

He added: "Disabled people should not have to pay to fix black holes in the public finances."

The Government's concessions have gutted the reforms, leaving only parts of the current Bill still on the table.

Proposals to cut the health element of universal credit by almost 50% for most new claimants from April 2026 remain in place, along with an above-inflation increase in the benefit's standard allowance.

In an earlier climbdown, Work and Pensions Secretary Liz Kendall said existing recipients of the health element of universal credit, and new claimants with the most severe conditions, would have their incomes "fully protected in real terms".