Sir Keir Starmer has said his welfare reforms now strike “the right balance” after he U-turned in the face of a major backbench rebellion.
Speaking for the first time after Downing Street agreed a series of concessions on its welfare policy, the Prime Minister said the climbdown followed a “constructive discussion” with Labour rebels.
He told broadcasters on Friday: “The most important thing is that we can make the reform we need.
“We talked to colleagues, who’ve made powerful representations, as a result of which we’ve got a package which I think will work, we can get it right.
“For me, getting that package adjusted in that way is the right thing to do, it means it’s the right balance, it’s common sense that we can now get on with it.”
Earlier, Work and Pensions Secretary Liz Kendall said the party was in “a good place” on welfare reform, after offering concessions to rebels late on Thursday.
Some 126 Labour MPs had signed an amendment that would halt the Universal Credit and Personal Independence Payment Bill in its tracks when it faces its first Commons hurdle on Tuesday.
Leading rebels now believe the concessions on offer, which include protecting personal independence payments (Pip) for all existing claimants, will be enough to win over a majority.
However, the fallout threatens to cause lasting damage, as harder line rebels remain opposed to the legislation and some backbenchers have called for a reset of relations between Number 10 and the parliamentary party.
But the reversal means Chancellor Rachel Reeves now faces a scramble to fill a potential hole in her budget this autumn, with the cuts now likely to save much less than the £4.8 billion the Government had expected.
Economists at the Institute for Fiscal Studies and the Resolution Foundation have both suggested the changes could reduce that figure by up to £3 billion.
But Downing Street has so far declined to set out its own figures for how much it now expects to save, or to say how the shortfall will be covered beyond insisting there would be no “permanent” increase in borrowing and refusing to rule out tax rises.
Facing questions about the climbdown on Friday, Ms Kendall denied suggestions she had found it “difficult” to water down reforms she had so strenuously defended and said the concessions left the Bill in “the right place”.
“We have listened to people, we have engaged with them,” she said.
“I think we’re in a good place now, alongside the huge investments we are putting in to create the jobs that people need in every part of the country… but also to make sure there’s employment support for those who can work and protections for those who can’t.”
The Government has also left the door open to further reform down the line, with Ms Kendall saying there need to be “changes in the future” to ensure “people who can work do”.
The Government’s original package had restricted eligibility for Pip, the main disability payment in England, as well as cutting the health-related element of universal credit.
Existing recipients 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.
Now, the changes to Pip will be implemented in November 2026 and apply to new claimants only while all existing recipients of the health element of universal credit will have their incomes protected in real terms.
The concessions on Pip alone protect some 370,000 people currently receiving the allowance who were set to lose out following reassessment.
The changes represent a major climbdown for the Prime Minister, just days after he insisted to reporters he would “press on” with the cuts, arguing there was a “moral case” for them.
Dame Meg Hillier, one of the leading rebel voices, hailed the concessions as “a good deal” involving “massive changes” to protect vulnerable people and involve disabled people in the design of future reforms.
She said: “It’s encouraging that we have reached what I believe is a workable compromise that will protect disabled people and support people back into work while ensuring the welfare system can be meaningfully reformed.”
But not all the rebels have been satisfied with the changes, with several suggesting they would create a “two-tier system” and raising questions about who would be classified as a new claimant after November 2026.
One told the PA news agency that discontent and low morale among the backbenches would “continue to fester” without a “wider reset” of relations between Number 10 and the Parliamentary Labour Party.
Another accused decision-makers in Government of operating as an “exclusive club” and showing “disregard” for both its MPs and experts outside Westminster, while some claimed Dame Meg had failed to include other backbenchers in her negotiations.
Conservative leader Kemi Badenoch criticised the U-turn, saying the Government’s failure to make “minor savings” on welfare showed they were unable to deal with major issues.
Liberal Democrat work and pensions spokesman Steve Darling said his party would continue opposing the Bill, saying the proposed cuts would still “cause immense damage to some of the most vulnerable”.
There was mixed reaction among charities to the prospect of concessions.
Learning disability charity Mencap said the news would be a “huge relief to thousands of people living in fear of what the future holds”.
But the MS Society urged rebels to hold firm and block the Bill, insisting any Government offer to water down the reforms would amount to “kicking the can down the road and delaying an inevitable disaster”.
