Keir Starmer could face biggest rebellion over disability benefit freeze

Keir Starmer could face the biggest rebellion of his premiership with dozens of Labour MPs angry at his plans to cut billions from the rising welfare bill and threatening to vote against freezing disability benefits.

In a bid to avoid a damaging showdown with MPs and peers, Downing Street began inviting groups of Labour backbenchers to meetings on Wednesday, stressing the “moral case” for changes designed to get people back to work as they made the case for painful changes.

The Guardian understands that dozens of MPs have urged the government to think again. Many are particularly concerned that Rachel Reeves is set to go further than the former Tory chancellor George Osborne who, despite cutting working-age benefits for four years, kept the personal independence payments (Pip) rising.

Some of those in the meetings revealed that No 10 officials appeared taken aback by the scale of the anger, especially from new MPs who have been unstintingly loyal.

Senior government figures have signalled in private conversations that they may still be open to change, but any climbdown could leave the chancellor with a major fiscal hole to fill.

Government officials believe that freezing the Pip would almost certainly require a vote on primary legislation, as certain benefits are protected by the Social Security Administration Act 1992, which states they should rise by inflation each year.

Given the government’s large majority, there is little chance of it failing to push through its planned changes to the disability benefit system, but some Labour MPs said they would nevertheless struggle to vote for any measures that take money away from the poorest in society.

One told the Guardian: “We’re in government and I feel utterly useless. They [No 10] will understand our frustrations, though largely private, when we get a chance to vote.”

Liz Kendall, the work and pensions secretary, is understood to have secured the savings to pay for employment support despite tensions with the Treasury, which was said to have questioned the value of the schemes.

At prime minister’s questions, Starmer told MPs that he understood the worries of disabled people and their families over the welfare cuts. He added: “But we inherited a system which is broken, it is indefensible, economically and morally, and we must and we will reform it.

“We will have clear principles, we will protect those who need protecting. We will also support those who can work back to work, but Labour is the party of work, we’re also the party of equality and fairness.”

Kendall is now expected to announce the plans in a Commons statement early next week. Government insiders acknowledged that she will have a “hard argument to make” over disability benefits, but believe the public supports welfare cuts more generally.

“While the next election won’t be won or lost on welfare, we do need to show progress on limiting the rising bill,” one source said. They argued that the bill for disability benefits, which rose by nearly £13bn to £48bn between 2019-20 and 2023-24, is unsustainable.

Under current plans, the bulk of almost £6bn of cuts will come from the Pip, which is not linked to work. Eligibility criteria for the key disability benefit will be tightened, while some Pip payments are expected to be frozen. Despite some early speculation, the benefit will not be means tested.

There are also expected to be smaller cuts including raising the basic rate of universal credit for those looking for – or in – work, while cutting it for those judged as unfit for work, as an incentive for some disabled people to seek employment.

Some regular reassessments for benefits are now likely to be carried out in person, rather than over phone, which officials view as too lax. Others will continue remotely.

The £1bn for back-to-work programmes for the long-term sick ranges from “supportive phone calls” to more intensive work placements and courses.

One government source said Reeves’s department had been “very short-sighted” over the value of the back-to-work schemes, and where the savings should be spent. But a Treasury source said that she understood the importance of reinvesting in such programmes.

The focus will be on people aged 22 and over who are out of work, with those between 18 and 21 covered by the government’s youth guarantee announced in the autumn in a drive to get hundreds of thousands into jobs or education.

Labour wants to tackle the one in eight young people aged 18 to 24 who are not currently in education, employment or training. Ministers have already warned that they will lose their benefits if they refuse to take up opportunities.

The chancellor has turned to the welfare bill to plug a gap in the public finances after higher borrowing costs and a worsening growth outlook wiped out the headroom she had to operate within her own fiscal rules.

However, economists said that only straightforward cuts to benefit levels and tighter eligibility could be included in the Office for Budget Responsibility (OBR) forecasts for the spring statement later this month, and that it would be reluctant to include reforms as bankable savings.

In a private meeting of Labour MPs on Monday, Starmer said Britain’s benefits system is the “worst of all worlds”, with the number of people out of work or training “indefensible and unfair”.

The prime minister said he would take tough decisions to cut the bill for working-age health and disability benefits, which is expected to hit £70bn by 2030. The government has already vowed to cut £3bn over the next three years.