UK's Starmer waters down welfare cuts to quell Labour revolt

By Andrew MacAskill and Elizabeth Piper

LONDON (Reuters) -British Prime Minister Keir Starmer has sharply scaled back planned welfare cuts to quell a damaging rebellion by lawmakers in his governing Labour Party.

More than 100 Labour lawmakers had publicly opposed Starmer's reforms, which sought to shave 5 billion pounds ($6.9 billion) per year off a rapidly rising welfare bill. They had argued that the plans failed to provide support for disabled people and those with long-term health conditions.

Faced with the prospect of a defeat in parliament next week - just a year after he won a landslide majority in a national election - Starmer's office confirmed that the cuts would be scaled back.

"We have listened to MPs (members of parliament) who support the principle of reform but are worried about the pace of change for those already supported by the system," a spokesperson said.

The reforms are set to be put to a vote in parliament on July 1.

In a letter to lawmakers, work and pensions minister Liz Kendall said only new claimants would be subject to the planned tightening of eligibility for certain benefits payments.

Existing recipients, some of whom had faced losing those benefits, would now be unaffected.

"Our reform principles remain; to target funding for those most in need and make sure the system is sustainable for the future to support generations to come," Kendall said.

Labour lawmaker Meg Hillier, who chairs an influential parliamentary committee and had spearheaded the efforts to water down the bill, welcomed the government's move as "a good and workable compromise".

U-TURN

However, opponents slammed the changes as another government U-turn following a reversal in cuts to winter fuel payments and a decision to hold an inquiry into grooming gangs.

The opposition Conservative Party's work and pensions policy chief, Helen Whately, said the decision was humiliating, and represented a missed opportunity to cut the welfare bill.

"Starmer ducked the challenge - leaving taxpayers to pick up the bill," she said in a post on X.

The government has argued that cutting the ballooning welfare budget is necessary to shore up the public finances and get more people into work.

The government did not set out the cost of the change in policy. Care minister Stephen Kinnock said that details would come in the next budget, which is due in the autumn.

Annual spending on incapacity and disability benefits already exceeds Britain's defence budget and is set to top 100 billion pounds by 2030, according to official forecasts, up from 65 billion pounds now.

But the plans to cut payments to some of the most vulnerable in society have proven particularly painful for lawmakers in the centre-left Labour Party, which founded the state-run National Health Service and traditionally sees itself as the protector of the country's welfare state built after World War Two.

Despite Starmer's concessions, one Labour lawmaker, Peter Lamb, said after learning of the changes that he would vote down the bill "alone" if necessary.

"To me, it's insufficient when better options have repeatedly been put forward and ignored," Lamb said on X.

($1 = 0.7275 pounds)

(Reporting by Andrew MacAskill, Elizabeth Piper and William James; Editing by Daniel Wallis and Gareth Jones)