Downing Street prepares concessions to Labour welfare rebels to salvage bill

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Downing Street has indicated that Sir Keir Starmer will offer compromises to try to buy off rebel MPs who are threatening to unleash the biggest rebellion of his premiership next week over controversial welfare cuts.

A rising number of Labour MPs are planning to vote against the bill on Tuesday, with one ringleader telling the FT they demand a “wholesale rethink” of the measures rather than minor tweaks to the plans.

A Number 10 aide said on Thursday morning that conversations were taking place between MPs and ministers including work and pensions secretary Liz Kendall.

“Delivering fundamental change is not easy, and we all want to get it right, so of course we’re talking to colleagues about the bill and the changes it will bring,” the aide said. “We want to start delivering this together on Tuesday.”

More names joined the rebellion overnight, taking the number of MPs prepared to sign a “reasoned amendment” against the welfare bill to 126. There are also a handful of junior ministers and parliamentary aides understood to be on the brink of resignation if the government ploughs ahead. 

Toby Perkins, a moderate MP who led Kendall’s failed leadership campaign in 2015, joined the criticism, saying: “I fear that the changes . . . will hit too many disabled people, many of whom really need the payment in order to be able to access work or to cope with their disability.”

Trade minister Douglas Alexander, a member of the cabinet, suggested on Thursday morning that there could be concessions from the government and struck a conciliatory note — saying rebels were “bringing these issues to the table for the very best of reasons”.

“There is common ground between us in saying if there are improvements that can be made let’s have conversation, figure out what those improvements are and make sure we get this critical piece of reform legislation not just right fiscally, but right in terms of the impact on vulnerable people,” Alexander told BBC Radio 4’s Today show.

The legislation is designed to address the fact that 2.8mn people in the UK have a long-term health condition that prevents them from working, while the government says one in 10 working-age adults claim a health-related benefit. 

Reforms to both disability and incapacity benefits are expected to save the Treasury about £4.8bn, according to government estimates. Rachel Reeves, the chancellor, is seen by rebels as one of the biggest blocks to agreeing concessions.

One of the changes previously discussed by ministers is a tweak to the proposed Personal Independence Payment (Pip) assessment rules. 

Currently, Pip recipients score up to 12 points across 10 categories based on their needs. Initial plans had been to change the requirements so people needed four points in any one category, a move that would have disqualified 800,000 people from the system. 

Instead, the possible change would see anyone with a high overall score, potentially of 12, still able to claim the payment, according to two people briefed on the discussions. This measure could add around 210,000 people back into the scheme. 

Another change that has been mooted is to decrease the cut-off from four points to three points, which would equate to about 314,000 more people receiving the benefit, according to the Resolution Foundation think-tank.

The government could alternatively speed up the extra £1bn of funds promised to help people back into work, which are currently not due to come in until the end of this decade. 

Louise Murphy, from the Resolution Foundation, told the FT that she thought moving to allow people who receive a higher score overall to receive the benefit, even if they do not exceed four points on any criteria, would be the “most defensible ideologically”.

“The more points you have the more needs you are likely to have because you struggle across the board,” she said.

But one of the rebel ringleaders told the Financial Times: “Tinkering with the eligibility criteria would not end this, what we are looking for is a wholesale rethink by the government, and now that they’ve seen the level of unhappiness in the [Parliamentary Labour party] they should consider very carefully.”