Government climbdown on welfare Bill marks third U-turn this month
Here, the PA news agency looks at three major policy changes this month.
– Welfare reforms
The Universal Credit and Personal Independence Payment Bill was put in motion to change who could qualify for certain disability and sickness benefits.
The package restricted eligibility for Pip, the main disability payment in England, and cut the health-related element of Universal Credit, in a bid to save £5 billion a year by 2030.
But a backbench rebellion of more than 120 Labour MPs forced Sir Keir into a U-turn.
In an attempt to appease those MPs, planned cuts will now only affect future applications for benefits, rather than existing claimants.
– Winter fuel payment
The Government scrapped winter fuel payments for pensioners who do not receive pension credits or other means-tested benefits just weeks after it came to power in July.
It was described as a 'necessary and responsible' move by Chancellor Rachel Reeves, who argued it would help fill the £22 billion fiscal black hole.
The Government said that changing the threshold for the payment would save £1.5 billion each year.
But at the start of this month, the Prime Minister announced that the Government would reinstate winter fuel payments for millions of pensioners.
The payment, worth up to £300, will be restored to the vast majority of pensioners who previously received it because anyone with an income of under £35,000 a year will now get the payment automatically.
The Government said the change will cost £1.25 billion.
– Grooming gangs
Sir Keir has also U-turned on holding a national inquiry into grooming gangs.
In January, the Prime Minister accused those calling for an inquiry of 'jumping on a far-right bandwagon' after tech entrepreneur Elon Musk criticised the UK for its lack of action on the issue.
But following the recommendations of a report by Baroness Louise Casey into the scale of group-based child sexual abuse, Sir Keir announced in June that there would be a full national statutory inquiry.
The Prime Minister had initially only promised five local inquiries in the most prevalent areas for grooming gangs.
Asked about the change, Sir Keir said: 'I've never said we should not look again at any issue.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
BBC News
13 minutes ago
- BBC News
Campaigning Liverpool kids celebrate free school meals success
A group of campaigning schoolchildren arrived on the steps of No 10 Downing Street earlier to hand over a special thank-you message. Four pupils from Monkstown Primary School in Liverpool had joined the campaign to extend eligibility for free school meals to children of families on Universal Ahmed, Max and Josie, all aged 11 and in year six, were joined for the No Child Left Behind Coalition, a campaign organised by the National Education Union (NEU).The four wanted to thank the government for extending the free school meal entitlement and handed over a card to staff at Downing Street. Earlier this month Sir Keir Starmer announced an extension of the programme, which will cover the daily cost of school lunches to an additional half a million children from six teacher Anne-Marie Ferrigan runs a project called Pupil Voice at Monkstown, which aims to let the children have a say in what the school does. She told BBC Radio Merseyside: "When they researched it, they decided that actually it wasn't acceptable that we were not getting free school meals for all the children and all the families who couldn't afford it." Josie, who made the trip to London, said: "Some of our friends in school and in our classes have struggled with that and we wanted to make it fair." Ms Ferrigan said: "We're so, so proud of all the children here at Monkstown, the fact that they can put themselves across and they can put themselves in somebody else's shoes and understand what that might feel like. "And then the fact that they want to do something about it, the fact that they want to give up their time to make change for something that doesn't even affect some of them." Listen to the best of BBC Radio Merseyside on Sounds and follow BBC Merseyside on Facebook, X, and Instagram. You can also send story ideas via Whatsapp to 0808 100 2230.
Telegraph
14 minutes ago
- Telegraph
The real Starmer has this week revealed himself: a Corbynista in a Blairite suit
It's the spinelessness of it all that gets me. We knew Keir Starmer was weak. We knew it when he recorded a leadership pitch in 2020 that could have been directed by Ken Loach – only to emerge as some sort of budget Tony Blair impersonator in office. Deep down, we knew what we were getting; no one could have seriously believed the Prime Minister, a self-professed socialist who served so willingly under Jeremy Corbyn wouldn't do exactly this to the country. But did we think the capitulation would happen this quickly and under so little pressure? After 14 years of Conservative calamity, which left a trail of broken promises in its wake, people could have been forgiven for hoping this self-styled beacon of 'stability and moderation' would at least try to fulfil his pledge of a 'government unburdened by doctrine, guided only by a determination to serve your interests'. When he called, on the steps of Downing Street, for a 'return of politics to public service,' and vowed to 'tread more lightly on your lives', things were that bad that voters gave him the benefit of the doubt. After the horror of Covid, the cost of living crisis, the embarrassment of Liz Truss's premiership, and record numbers of illegal immigrants arriving here by boat, they thought to themselves: well, it can't get any worse. 'Country first, party second,' Starmer vowed and people thought, maybe, just maybe, this respectable lawyer would put the needs of the electorate first. But no. Instead we have ended up with something far worse than the Tories could ever muster. In Starmer, we have not just ended up with a Butlin's Blair but a cut-price Compo; a coward leading a craven cabinet. Until now, I thought lily-livered Labour was best summed up by Starmer's complete inability to say whether he supported the US air strikes on Iran's nuclear sites. Kemi Badenoch was unequivocal in her support of Donald Trump's attempts to ensure we can no longer be nuked by murderous mullahs hellbent on wiping Israel from the map along with any of her allies. So was Nigel Farage. It shouldn't be a difficult question for any politician with the faintest concern for the preservation of western civilization. Still, handwringing Starmer struggled, calling for more negotiation with a regime that once described America as the Great Satan, murders women for removing their hijabs, throws gays off buildings and funds terrorist Hamas, Hezbollah and the Houthis to kill Jews (and anyone else in their path). So far, so invertebrate, and then, on Friday, Starmer took another step down the yellow brick road by giving an interview to the Left-leaning Observer, in which he expressed ' deep regret' for saying that Britain risked becoming an 'island of strangers ' because of mass migration. Insisting it 'wasn't right' to use 'that particular phrase' in a speech last month, despite No 10 previously insisting that he stood by his words, he said neither he nor his speechwriters had been aware that the remarks could have been interpreted as an echo of the language of Enoch Powell. 'I wouldn't have used those words if I had known they were, or even would be interpreted as, an echo of Powell. I had no idea – and my speechwriters didn't know either. 'But that particular phrase – no, it wasn't right. I'll give you the honest truth – I deeply regret using it.' Have you ever heard such weapons-grade gaslighting? If it wasn't gutless enough to be backtracking on the speech, to then suggest that no one in No 10 considered that it might be a bit Rivers of Bloodish is an insult to anyone with even the most rudimentary understanding of British politics. To make matters worse, Never Here Keir then went on to whine that he 'wasn't in the best state to make a big speech' because he'd just come back from a three-day trip to Ukraine. Boo hoo. Try being Volodymyr Zelenskyy for a week, you big sissy. Good grief. The mea culpa came less than 24 hours after he agreed to water down his controversial welfare reforms to stave off a massive rebellion. On Wednesday, covering for lesser spotted Starmer at PMQs, Deputy Prime Minister Angela Rayner insisted that the Government would not back down on its proposals to cut nearly £5 billion from the welfare bill by limiting access to disability payments. It took less than two days for Sir Keir to cave in, offering compromises that will wipe out at least a third of the savings the Chancellor had banked on making through welfare reform. After the similarly feeble U-turn on the winter fuel allowance cuts, tax rises now look like a certainty come the autumn Budget. So not only is the benefits bill going to continue to rise, working people are once again going to have to pay the price thanks to the inadequacy of our current administration. Almost a third of all income tax revenue and National Insurance contributions are being spent servicing the nation's total welfare budget which has ballooned by £86 billion compared to a decade ago, totalling £296 billion in 2023-24, the last year for available data. But instead of tackling this behemoth on behalf of a nearly bankrupt nation, Starmer has opted to save his own skin. It's not just spineless, it's shameful. We used to believe Britain under Blair was a Left-wing country. But how foolish that seems now, under his successor. Margaret Thatcher had created the conditions for people to work, to save, and to own their homes. People still believed in a 'hand up' and not a 'hand out'. Look at us now, once again expecting the state to solve all our problems. Aspiration, entrepreneurialism, good old fashioned graft; all these courageous qualities have been quashed by pusillanimous, progressive politicians living in a fantasyland where there are no trade-offs, just ever more government spending funded by soaking 'the rich''. And the worst of them all is socialist Starmer – a man with so little backbone he can't even stand up to his own MPs.
Telegraph
15 minutes ago
- Telegraph
Reeves expected to extend stealth raid on income tax
Rachel Reeves is expected to freeze income tax thresholds in her autumn Budget to fill a £40 billion black hole. The Chancellor has been put under pressure by three policy U-turns by Sir Keir Starmer, which are set to increase public spending by about £4 billion later in the year. Some within the Labour Party believe she may not survive the year if she is forced to raise taxes and impose further cuts at the same time. The latest policy reversal, on benefit cuts, will mean the Government will save just half of the £5 billion it hoped to recoup from sickness and disability payments. But Ms Reeves has left herself with few options to raise funds. As well as committing not to increase the rates of income tax, National Insurance or VAT, nor to raise corporation tax, she has insisted she will not break Labour's fiscal rules. Freezing the threshold for the additional rate of income tax was one of the suggestions in a memo from Angela Rayner, the Deputy Prime Minister, to Ms Reeves which was leaked to The Telegraph last month. The current freeze, which was due to be lifted in 2028, dragged seven million people into higher tax brackets last year, raising around £15 billion. Paul Johnson, the director of the Institute for Fiscal Studies, an independent think tank, said a further freeze in thresholds would be 'pretty high up the attractiveness scale' in this year's Budget. 'I think it's fairly likely, as a politically easy way to raise something of the order of £10 billion in additional revenue by the end of the Parliament,' he told The Telegraph. One Labour MP said the Chancellor was now 'in deep trouble' because she has already ruled out several of the easiest ways to raise revenue. 'It's hard to forgive her for where we are now. She locked herself in, foolishly, to a set of commitments that have become unsustainable,' the MP said. The Treasury was already facing a black hole of between £20 billion and £30 billion because of lower-than-expected growth forecasts, partly driven by Donald Trump's imposition of tariffs. The £4 billion cost of Sir Keir's U-turns is expected to be compounded by a revision to the Office for Budget Responsibility's (OBR) medium-term productivity forecast this summer and growth forecast this autumn, which could have an impact on revenues of between £7 billion and £8 billion. This week's decision to maintain benefit payments for existing claimants has cost the Treasury £2.5 billion, while the U-turn on winter fuel payments for pensioners cost a further £1.25 billion. Ms Reeves is facing backlash from Labour MPs over her proposal to cut benefits, which was designed to bring down the cost of welfare at the expense of thousands of claimants. Sir Keir, who watered down the measures to avoid the biggest rebellion of his career, insisted that his 'common sense' welfare reforms now strike 'the right balance'. But the situation leaves the Chancellor with little choice but to freeze income tax thresholds, which were due to rise in line with inflation from 2028. The policy would likely raise around £8 billion a year in tax receipts, but would cost a worker earning on an average salary thousands more in income tax by the end of the decade. Independent economists say a further freeze in the autumn is now all but certain, and that further increases on smaller taxes or a new raid on pensions could be required to make up the shortfall. Downing Street refused to rule out further tax rises on Friday, with a spokesman saying: 'As ever, as is a long-standing principle, tax decisions are set out at fiscal events.' However, Ms Reeves's team remains optimistic that good economic performance between now and the Budget will reduce the £105 billion cost of servicing government debt, which currently accounts for 8.2 per cent of public expenditure. The Bank of England is widely expected to cut interest rates at its next meeting on Aug 7, although gilt yields are not directly determined by the base rate. Treasury officials also hope that the cost of energy will continue to fall, although it is acknowledged that instability in the Middle East could drive up the price of crude oil once again. Ms Reeves is adamant that she will not break her fiscal rules – to increase public sector borrowing as a percentage of GDP or raise money on the markets to fund day-to-day spending – and believes that maintaining market stability should be the Government's primary goal. Balancing the books with a stealth tax on income has been a favoured policy lever of successive chancellors. The current freeze to 2028 was introduced by Sir Jeremy Hunt in his 2022 Budget. But the policy results in more people paying higher rates of income tax as their wages increase – an economic phenomenon known as fiscal drag. OBR figures show that in 2024-25, some £15.3 billion extra was due to be raised thanks to the frozen thresholds. In the same year, the OBR predicted that the total welfare bill was set to shoot up by £16.6 billion. Figures released on Thursday show that seven million people have been dragged into paying higher rates of income tax as a result of the stealth raid on wages. Frozen thresholds forced an extra 520,000 taxpayers into the 40p bracket in the last year, according to estimates by HMRC. It brings the total to just over seven million in 2025-26, a 60 per cent rise from the 4.4 million in 2021-22 when income tax thresholds were first frozen under the Tories. The number of 45p additional-rate taxpayers has more than doubled from 520,000 to 1.2 million over the same period. Last November, Ms Reeves told MPs she would not raise taxes again or increase borrowing and that the Government would need to 'live within the means we've set ourselves' for the remainder of the Parliament. 'We're not going to be coming back with more tax increases, or indeed more borrowing,' she told the Treasury select committee.
