Published by Global Banking and Finance Review
Posted on July 1, 2025
By Andrew MacAskill, Elizabeth Piper and Alistair Smout
LONDON (Reuters) -British Prime Minister Keir Starmer won a vote on his welfare plans on Tuesday at significant political cost as he suffered the biggest parliamentary rebellion of his premiership and was forced to back down on key parts of the package.
After his lawmakers pushed him into a series of embarrassing U-turns to sharply scale back plans to cut benefits, lawmakers in the House of Commons gave their initial approval to a package of measures Starmer says are vital to securing the future of the welfare system.
But the scale of the rebellion - with 49 Labour lawmakers voting against the reforms - underlined the prime minister's waning authority.
A year after winning one of the largest parliamentary majorities in British history, Starmer has seen his personal approval ratings collapse and been forced into several policy reversals by his increasingly rebellious lawmakers.
"It's been a bumpy time tonight," work and pensions minister Liz Kendall told reporters after a session of parliament when lawmakers took turns to mostly criticise the planned changes. "There are definitely lessons to learn from this process."
Starmer came into office last year promising his big parliamentary majority would bring an end to the political chaos that defined much of the Conservative Party's 14 years in power. But the revolt over the welfare bill underlines the difficulty he has pushing through unpopular changes.
In the run-up to the vote, ministers and party enforcers known as "whips" had been locked in frantic last-ditch lobbying of undecided members of parliament to try to win their backing.
In a further concession to rebels about two hours before the vote, the government said it would not finalise changes in eligibility for a key benefit payment until a review into the welfare system had been completed.
Paula Barker, a Labour member of parliament, called the attempt to pass the plans "the most unedifying spectacle that I have ever seen".
In the end, the government suffered by far the biggest rebellion of Starmer's premiership, eclipsing the 16 members of parliament who opposed an infrastructure bill earlier this month.
Mel Stride, the opposition Conservative Party finance policy chief, described Starmer's team as "a government that's lost control", only able to pass the legislation by having "ripped the heart of it out".
Labour lawmaker Henry Tufnell said by agreeing to the concessions Starmer had shown "he's willing to take on board these criticisms that people have raised."
Almost 90 disability and human rights groups before the vote urged lawmakers to vote down the legislation.
RISING COSTS
The proposed reforms are designed to reduce the cost of Britain's growing welfare bill, which the government has described as economically indefensible and morally wrong.
Annual spending on incapacity and disability benefits already exceeds the country's defence budget and is set to top 100 billion pounds ($137 billion) by 2030, according to official forecasts, up from 65 billion pounds now.
More than half of the rise in working-age disability claims since the COVID-19 pandemic relates to mental health conditions, according to the Institute for Fiscal Studies think-tank.
The government had initially hoped to save 5 billion pounds ($6.9 billion) a year by 2030 by tightening rules for people to receive disability and sickness benefits.
But after the government conceded to pressure from its lawmakers, it said the new rules would now apply only to future applicants, not to the millions of existing claimants as had been proposed. Analysts estimated the savings would likely be closer to 2 billion pounds.
It was not clear how the additional last-minute change would impact the hoped-for savings in the welfare reform package.
Opposition politicians said the government would now have to raise taxes or cut government spending elsewhere to balance the public finances in the annual budget later this year.
The government has said there would be no permanent increase in borrowing, but has declined to comment on possible tax rises.
While Starmer is under no immediate threat, and the next election is not expected until 2029, his party now trails behind Nigel Farage's populist Reform UK in opinion polls.
John Curtice, Britain's most respected pollster, said this week that Starmer was the most unpopular elected prime minister in modern British history, and that voters still did not know what he stood for a year after he was elected.
(Reporting by Elizabeth Piper, Andrew MacAskill and Alistair Smout, editing by Alex Richardson and Rosalba O'Brien)
