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Labour U-Turn on Welfare Reforms: Government Agrees to Protect Existing Claimants

Strategic Insights

— 1 min read

As the British government attempted to push through contentious welfare reform, Labour leader Sir Keir Starmer announced a U-turn, agreeing to protect existing claimants of personal independence payments and the health element of Universal Credit. This concession, which will only affect future claimants, follows a major backbench rebellion led by 126 Labour MPs. The decision comes as a new survey by BMG Research showed that Labour had closed the polling gap with Reform UK but remained behind the party in terms of popularity.

Key Takeaways:

  • The U-turn will only affect future claimants of personal independence payments and the health element of Universal Credit, meaning existing claimants will continue to receive these benefits.
  • The estimated shortfall in the government's budget due to the cuts is expected to be reduced by up to £3 billion, according to economists at the Institute for Fiscal Studies and the Resolution Foundation.
  • The reversal of the welfare cuts is seen as a significant win for Labour rebels, with some 126 Labour MPs having signed an amendment to halt the Universal Credit and Personal Independence Payment Bill.
  • Despite the U-turn, 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.
  • The Scottish Greens and the SNP have criticized the decision, with Maggie Chapman and Stephen Flynn respectively labeling it "astonishing" and creating a "two-tier disability system".
  • The U-turn is the third in a month for Prime Minister Sir Keir Starmer, after reversing decisions on cutting winter fuel payments and a grooming gangs scandal.

Statistics:

  • 126 Labour MPs signed an amendment to halt the Universal Credit and Personal Independence Payment Bill.
  • Up to £3 billion in potential savings from the welfare cuts could be lost due to the U-turn, according the economists at the Institute for Fiscal Studies and the Resolution Foundation.
  • The BMG Research poll found that 30% of voters support Reform UK, 27% support Labour, and 19% support the Conservatives.
  • 1,617 UK adults were interviewed online for the BMG Research survey between June 24-25.

Sources:

  • The Telegraph
  • The Guardian
  • BMG Research
  • Institute for Fiscal Studies
  • Resolution Foundation

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