Labour MPs are divided over the government’s controversial plans to cut welfare spending, as a growing backbench rebellion threatens to halt the measures.
More than 120 Labour MPs have signed a “reasoned amendment” to the bill which would deliver the measures. If passed, this would effectively stop it in its tracks for the time being.
The plans have received fierce backlash from charities and campaign groups since their introduction in March, when Rachel Reeves announced: “The Labour Party is the party of work. We believe that if you can work, you should work. But if you can’t work, you should be properly supported.”
Ministers have revealed more details about their plans for welfare spending since this, but of those only two key measures are up for a vote on Tuesday.
Entitled the Universal Credit and Personal Independence Payment Bill, this legislation comprises changes those two benefits exclusively. Here’s what you need to know:
Cutting back PIP eligibility
Currently claimed by 3.7 million people, PIP is designed to help with extra costs incurred by living with an illness or disability.
The plans see the “daily living” element of the benefit effectively become harder to claim as the eligibility criteria is tightened. Applicants are currently assessed based on how limited their ability is across ten activities, and awarded points between zero and eight for each based on severity.
Under current rules, an applicant needs to be scored at least eight points in any combination to be awarded the lowest rate of PIP. Following the changes, they would need this and to have scored four of these points in a single activity.
The planned changes would form the bulk of savings from Labour’s welfare reforms, at an estimated £4.1 billion. Under these rules, around 1.5 million current claimants would be found ineligible, the Office for Budget Responsibility (OBR) says.
However, the spending watchdog also estimates that this number is closer to 800,000 when accounting for a ‘behavioural response,’ but acknowledges this is a ‘highly uncertain judgement’.
Changing Universal Credit rates
The other key change in the bill sees the rates of Universal Credit rebalanced, with the standard rate rising while the health-related rate is cut back.
Labour said it will “rebalance payment levels” in Universal Credit to “promote work and address perverse incentives” in the system, beginning in April 2026.
The plans would bring in an across-the-board increase to the standard Universal Credit allowance for new and existing claims from April 2026. This will be a boost of £7 a week, to £106.
At the same time, the payment rate for the health-related element of Universal Credit will be frozen. Those already receiving it, will still get £105 a week until 2029/30. Meanwhile, new claimants for this element will get just £54 a week – almost half.
These claimants will continue to receive the standard Universal Credit allowance alongside this entitlement, and be eligible from the uplift to that as with any other claimant.
Around 2.7 million families are forecast to be in receipt of the health element when the changes come into effect, the OBR says, with all of them affected.
What issues have the Labour rebels raised?
Several issues are listed in the amendment, with the text highlighting the Office for Budget Responsibility’s (OBR) stark analysis that the plans would push 250,000 into poverty, including 50,000 children.
Another concern listed is that the government's decision not to conduct a formal consultation with disabled people regarding the two crucial reforms the bill entails.
The amendment also notes that members are set to vote on the bill months before the OBR is due to publish its crucial employment impact assessment in autumn 2025, which would detail how many people the reforms are expected to help into work.
It also raises the concern is that the additional employment support which has been pledged by the government alongside the reforms is not due until the end of the decade, up to four years after these measures come into effect. Alongside these, no assessment has been published on the impact the changes could have on health or care needs.
Despite these issues, the amendment's text also acknowledges "the need for the reform of the social security system" and expresses agreement with "the government’s principles for providing support to people into work and protecting people who cannot work."
