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Sir Keir Starmer insisted “we can now get on with it” as he broke his silence over a humiliating disability benefit cuts u-turn.
He described a massive rebellion by Labour MPs as “a constructive discussion” but failed to explain how the Government will pay for the climbdown, which could cost the Treasury more than £3 billion.

The Prime Minister has caved in to Labour rebels and significantly watered down plans to cut the number of people eligible for Personal Independence Payments, which help with living costs. It follows a huge row with Labour MPs, who threatened to vote down the plan on Tuesday.

There were warnings the Government could be forced to impose more tax rises – but Downing Street said only that Chanellor Rachel Reeves would explain how the measure wil be paid for at the autumn Budget. The Prime Minister has caved in to Labour rebels and watered down plans to cut the number of people eligible for Personal Independence Payments, which help with living costs. It followed a huge backbench rebellion which threatened to impose a humiliating defeat on the Government in a vote on Tuesday.

Sir Keir said the changes made to the Government’s welfare Bill in response to backbench pressure strike “the right balance” and “we can now get on with it”.

The Prime Minister described the concessions as “common sense” after Downing Street agreed to water down the reforms amid the prospect of major rebellion from Labour MPs.

Speaking during a visit on Friday, he said: “It’s very important that we reform the welfare system, because it doesn’t work and it traps people, and therefore we’re going to press ahead with the reforms. And the principles are if you can work, you should work. If you need help getting into work, you should have that help and support. But if you can’t work or there’s no prospect of work, then you must be protected.

“We need to get it right. That’s why we’ve been talking to colleagues and having a constructive discussion. We’ve now arrived at a package that delivers on the principles with some adjustments, and that’s the right reform, and I’m really pleased now that we’re able to take this forward.”

Asked what the Government would do about a “hole” in the public finances the changes are said to leave, he said: “Well, the changes still mean we can deliver the reforms that we need, and that’s very important, because the system needs to be a system that is fit for the future, and this is fit for the future.

“All colleagues are signed up to that, but having listened, we’ve made the adjustments. The funding will be set out in the budget in the usual way, as you’d expect later in the year.

“But the most important thing is that we can make the reform we need. We can talk to colleagues who’ve made powerful representations as a result of which we’ve got a package, which I think can work… For me, getting that package adjusted in that way is the right thing to do. It makes the right balance. It’s common sense and we can now get on with it.”

He originally planned a dramatic restriction on eligibility for Personal Independence Payments (PIP), which help disabled people with living costs. Along with a cut to the health-related element of Universal Credit, this was due to save around £5 billion a year by 2030.

But Work and Pensions Secretary Liz Kendall sent a late-night letter to MPs on Thursday saying PIP changes coming into force in November 2026 and will now apply only to new claimants, while all existing recipients of the health element of Universal Credit will have their incomes protected in real terms.

It was enough to appease many of the 126 Labour rebels who signed an amendment opposing the cuts and Dame Meg Hillier, one of the leading critics, described the concessions as “a good deal” involving “massive changes”. Some left-wing Labour MPs could still vote against the measures next week, but the Government is now likely to win he vote.

Think tank the Resolution Foundation calculated the changes will cost between £2.6 billion and £3.2 billion in 2029-30, making more tax rises likely as Chancellor Rachel Reeves has ruled out further borrowing.

Conservatives pointed out that businesses were already suffering from the impact of increases to National Insurance, which they call a jobs tax. Sir Mel Stride MP, Shadow Chancellor of the Exchequer, said: “Labour promised not to raise taxes on working people, and their jobs tax has led to rising unemployment and growth being halved.

“Now the Government have been unable to rule out that taxes will go up this autumn in order to pay for Keir Starmer’s latest U-turns. This is a crisis made in Downing Street, Labour must stop making the British people pay the price for their failures.”

Many Labour MPs were also dismayed that the Prime Minister had allowed the crisis to develop. One former rebel said they would no longer vote against the cuts but said: “He’s been shown up that he’s not a politician this week.

“It’s the beginning of the end. It’s not the end but it’s the beginning of the long march to Keir’s resignation.”

Another warned that the climdown would encourage more rebellions in the future. “He’s sent a message to Labour MPs that if you put enough pressure on, he’ll back down.”

Charities and disability groups warned the Government was creating a “two-tier” benefits system, in which people with the same needs due to disability or illness were treated differently depending on when they applied for support.

The Government’s impact assessment shows that even with the concession, 430,000 people by 2029-30 will lose an average of £4,500 a year because they will not receive PIP when they would previously have been eligible.

Jackie O’Sullivan, Executive Director at learning disability charity Mencap, said: “We are encouraged that campaigners have been heard in their opposition to the planned cuts. But we fear that if, from next year, new claimants for PIP face different rules, there will be a generational divide in the quality of life for people with a learning disability.”

It now appears the Government will win the vote when it goes ahead, but under the changed proposals existing claimants will still receive the payment, with only people who apply in the future subject to the new, stricter rules. Ruth Curtice, chief executive of the Resolution Foundation think tank, suggested the changes could cost as much as £3 billion – and raised the prospect of further tax rises.