No 10 climbs down over welfare bill in move to win over Labour rebels

Downing Street has announced major changes to the welfare bill in an attempt to win the support of more than Labour 120 rebels who had threatened to vote against it next week and hand Keir Starmer a damaging first defeat as prime minister.

Liz Kendall, the work and pensions secretary, wrote to Labour MPs on Thursday night to lay out the concessions, which were thrashed out over 24 hours of negotiations between senior rebels and government officials.

The compromises, which were revealed by the Guardian on Thursday, include exempting everyone currently receiving disability benefits from the changes and increasing the health element of universal credit in line with inflation.

Kendall said she would bring forward a more fundamental review into the personal independence payment (Pip) system and increase the amount of money to be spent on back-to-work schemes. One source suggested the changes could cost as much as £8bn across the parliament.

She said in her letter: “We have listened to colleagues who support the principle of reform but are worried about the impact of the pace of change on those already supported by the system.”

She added: “Taken together it is a fair package that will preserve the social security system for those who need it by putting it on a sustainable footing, support people back into work, protect those who cannot work and reduce anxiety for those currently in the system.

“Thank you to colleagues for engaging with us on these important reforms to social security.”

Meg Hillier, the chair of the Treasury select committee, who had led the rebellion, said in a statement: “This is a good and workable compromise and shows that the Labour government has listened and that working together with Labour MPs can move forward to support vulnerable disabled people, reform the welfare system in a just and inclusive way and contribute towards the economic growth and prosperity this country so desperately needs.”

More than 120 Labour MPs had signed an amendment to Tuesday’s bill calling for it to be paused indefinitely over concerns about the impact on disabled people. MPs were particularly concerned that the cuts, which were due to save £5bn, would make it too difficult to claim Pip.

Many of those rebels indicated on Thursday night they remained opposed to the measures, with some warning about the creation of a “two-tier” benefits system that distinguishes between existing and new claimants.

The Labour backbencher Alex Sobel told BBC Two’s Newsnight programme: “Whether you acquire disability at birth, five years ago or tomorrow, it should be the same for everyone.”

His colleague Nadia Whittome tweeted: “These concessions aren’t enough and they should worry us all. If you become disabled tomorrow, you risk not having the support you need.”

Rachael Maskell, the Labour MP for York Central, said: “I and many more cannot accept this backroom deal.”

However, it is understood all the select committee chairs who signed the rebel amendment are now backing the government, meaning dozens of other moderates are likely to do the same.

Some disability charities backed the changes. Jackie O’Sullivan, the director of strategy at the learning disability charity Mencap, said: “It is the right thing to do and sends a clear message – cutting disability benefits is not a fair way to mend the black hole in the public purse.”

The MS Society, however, accused the government of “kicking the can down the road and delaying an inevitable disaster”.

Government whips believe they now have the votes to win on Tuesday, having come perilously close to defeat on one of the government’s big economic policies.