What is Sir Keir Starmer's welfare bill and why is he facing a major Labour rebellion over it?

Sky News

25-06-2025

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Sir Keir Starmer faces the biggest rebellion of his premiership next week when his controversial welfare reforms are voted on in the Commons.
After initially securing support for the welfare bill - in principle, at least - a mutiny is building within the parliamentary party at the scale and potential impact of billions of pounds in cuts.
More than 100 Labour MPs have now signed a "reasoned amendment" to oppose the government's proposals - which, if passed, would effectively kill the legislation.
In the amendment, the MPs, who represent a broad spectrum of opinion in the party, call for a delay to assess the impact of cuts to personal independence payments (PIP), one of the main types of benefit for those living with a long-term health condition or disability.
They also cite the government's own figures showing that 250,000 people, including 50,000 children, could be pushed into poverty as a result.
Sky News takes a look at what the Universal Credit and Personal Independence Payment Bill proposes and why the prime minister has a major rebellion on his hands.
What are the welfare changes?
PIP
The biggest shakeup to the system involved changes to PIP - money given to people - some of whom are in work - who have extra care needs or mobility needs as a result of a disability.
People who claim it are awarded points depending on their ability to do certain activities, such as washing and preparing food, and this influences how much they will receive.
There are two components to PIP: the "living" component for everyday activities and the "mobility" component for getting around.
From November 2026, people will need to score a minimum of four points in at least one activity to qualify for the daily living element of PIP - instead of fewer points spread across a range of tasks.
The standard rate for the living component for PIP starts at £73.90 a week for the living component, while the higher rate is set at £110.40 per week.
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Currently, the standard rate is given if people score between eight and 11 points overall, while the enhanced rate applies from 12 points.
The changes to PIP will not affect the mobility component.
It is estimated that the government's package would lead to 800,000 fewer people being eligible for PIP.
Universal Credit
Universal Credit, which is also claimed by those who are in and out of work, is also undergoing changes.
The government intends to freeze the health element of Universal Credit, claimed by more than two million people, at £97 a week during this parliament, and cut the rate to £50 for new claimants.
There will also be a consultation on delaying access to the health top-up on universal credit until someone is 22, with the savings to be reinvested into work support and training opportunities.
However, ministers have pointed out that the standard universal credit allowance will be increased by £775 per year by 2029/30.
The Work Capability Assessment (WCA), which determines if a person is fit for work, will be scrapped in 2028, with financial support for people who are sick or disabled determined solely through the PIP assessment.
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Other reforms include:
• Merging jobseeker's allowance and employment and support allowance
• Introducing a "right to try" initiative so people who want to attempt to get back into work won't lose their benefits while they do
• The government will provide £1bn for targeted support schemes to help disabled people into work. But it's estimated these will only help 70,000 people find employment.
Why are some MPs unhappy?
While many MPs believe reform of the system is necessary due to the ballooning cost of the welfare bill - with the cost of long-term sickness and disability benefits for working-age people forecast to hit £70bn over the next five years - they are concerned that the bill does not take the right approach.
Concerns among backbenchers range from thinking the cuts are too harsh and will penalise some of the most vulnerable in society, to fear that not enough money and effort is going into the plan to get people into work, and that there has not been a formal consultation with disabled people.
One Labour MP told Sky News they believed the fact that the text of the welfare bill was published before the end of the consultation was proof the government was "not listening".
They said the £5bn savings package was a "hammer to crack a nut" and added: "We have gone for cut first and reform second. All we are doing is causing pain to people.
"We have to make the savings, but this is not the right way to do it."
What could the government do now?
For now, the government is insisting that the vote on Tuesday will go ahead.
Standing in for Sir Keir at the despatch box, Deputy Prime Minister Angela Rayner defended the reforms, arguing that ministers "won't walk away and stand by and abandon millions of people trapped in the failing system".
The prime minister repeated Ms Rayner's insistence, telling Sky News' political editor Beth Rigby at the NATO summit: "We're committed to reforming our welfare system. It doesn't work. It traps people. And it has to be reformed.
"And it also has to ensure that we've got a welfare system that is fit for the future.