The £5 Billion U-Turn That is Destroying Keir Starmer

Right, so it began with the smug certainty of a government with a massive majority, that thought it could sell austerity in a new suit, because this Labour government really isn’t any different to the 14 years of the Tories we had before, just more brylcreem. Keir Starmer’s Labour promised discipline, dignity, and decisiveness—what the country got instead was a policy bonfire, a mutiny on the Labour benches, and a benefits bill so thoroughly gutted, evil as it was that frankly it now probably qualifies for PIP itself. This wasn’t just a policy misstep—it was the legislative equivalent of sawing off the branch you're standing on, but given the opinion many hold of Keir Starmer, he could easily have been whittled out of said collapsed branch after it the floor. Greed, cruelty and incompetence sit at the heart of the story of how Starmer’s flagship welfare reforms, social security as they should be called, capsized in full view of the nation, leaving behind nothing but smoke, recriminations, and a very expensive hole in the Treasury's pocket, that they should never have been trying to fill off the backs of the poorest, the sickest and the most disabled anyway. Karma got Starmer and he might well very soon be toast, weakened as he now is in his own party, across the opposition benches and in the eyes of the populace who increasingly cannot stand him.
Right, so it was supposed to be a defining moment for Keir Starmer’s Labour government—proof of fiscal discipline, political resolve, and readiness to make “tough decisions” in difficult times, all built on the backs of the poorest in true red Tory fashion though. Instead, the Universal Credit and Personal Independence Payment (PIP) Reform Bill descended into a much deserved shambles. Stripped of its headline measures at the last minute, its savings vanished into thin air, and its political capital torched by rebellion, confusion, and backlash, so this once-centrepiece policy meant to prove fiscal discipline and responsibility over the public finances has now become an emblem of a government stumbling into crisis only coming up on its first anniversary into power.
What unfolded over the past week in Parliament, culminating last night was not just the unravelling of a single welfare bill—it was the detonation of a carefully stage-managed economic and political narrative. For weeks, the Starmer government had attempted to sell the public a vision of “tough love”: slashing disability benefits in the name of fiscal responsibility. Instead, the plan exploded in their faces, triggering an internal mutiny, leaving a yawning hole in Rachel Reeves financial plans, and drawing fierce condemnation from charities, economists, campaigners, and a significant portion of the Labour base, all thoroughly deserved not only because of how much they gave up to get this past a vote, but how much still in it, is still incredibly damaging, 150,000 people set to lose health benefit aid via their Universal Credit payments still. As the dust settles, the political wreckage points to one clear conclusion: Starmer’s government has revealed itself as ideologically hollow, tactically inept, and increasingly out of touch with the very people it claims to represent.
The Universal Credit and PIP Reform Bill, spearheaded by Work and Pensions Secretary Liz Kendall and backed by Chancellor Rachel Reeves, aimed to significantly restrict access to the Personal Independence Payment—a vital benefit for those with long-term physical and mental health conditions, additional money to help them deal with the additional expenses of their disabilities, many of whom use it to help them get to work, so all that work narrative that has surrounded this bill was always dishonest—and to overhaul Universal Credit in ways that would push many claimants off support. Starmer and Reeves claimed the measures were necessary to restore fiscal order and reduce dependency on state welfare. The Office for Budget Responsibility was told to expect up to £5 billion in annual savings from these reforms.
But behind the rhetoric of “helping people into work” was one particularly brutal measure. The bill’s most controversial element—Clause 5—sought to narrow eligibility for PIP by redefining what counts as “disabling,” by changing the way points are calculated to secure assistance, 4 points being needed in a single category and 8 points minimum across all section to qualify, instead do 8 points across all categories no matter how that worked out. Critics argued that this was less about enabling work and more about cutting support to the most vulnerable and given the government had been stupid enough to admit it was about savings, not about targeted support at those who most need it, the arrogance of the Starmer regime has to some extent been its undoing. The bill is effectively a war on the disabled, no ifs or buts, couched in technocratic language and talk of economic necessity to dull the public outrage and try to win them over.
This wasn't just about budget lines or bureaucratic terminology. The proposed criteria even as they stand will render thousands of people invisible to the state, stripping them of access to vital financial lifelines and replacing their autonomy with paternalistic oversight, but before it was watered down to remove the PIP element of the bill it would have been significantly worse. This is a vision of welfare not as social security, but as conditional charity and people are still set to suffer even as many Labour MPs were foolishly won over.
But Starmer still misjudged the climate, he cannot read a room if he tries. Inside Parliament, resistance to the bill intensified throughout June. At least 126 Labour MPs were publicly or privately opposing the measures, and major disability rights charities, including Mind and Scope, launched urgent campaigns warning of catastrophic consequences. Mind described the bill as having “broken trust” with millions of disabled people and condemned the legislative process as shambolic, a rushed attempt to bulldoze cuts through with as little scrutiny as possible.
Outside Westminster, a groundswell of opposition grew. Disability advocacy groups held demonstrations across the country. Hashtags like #KillTheBill and #NoToPIPCuts trended for days. Letters poured into MPs' inboxes. Petitions soared into the hundreds of thousands of signatures. These were not fringe voices—they were those directly affected, speaking with clarity and urgency. They saw through the government’s attempt to disguise cruelty as pragmatism.
Starmer’s claim to moral superiority and “grown-up government” began to falter as the sheer cruelty and incoherence of the proposals became increasingly clear over the past several weeks.
The crescendo came last night though, during the final Commons debate before the vote. Seeing the danger of losing a vote with such a large majority, DWP minister Stephen Timms stood at the despatch box and withdrew Clause 5 live, without prior warning, effectively gutting the entire bill of its most controversial and fiscally significant content, because at this point, the Bill was no longer going to save the Treasury any money. This was where the savings were, in PIP, in the benefit that supports disabled people to live in dignity and be able to access work.
Timms’s explanation was as limp as it was revealing. “We believe the time is not right,” he mumbled, as if casually shelving a policy paper rather than detonating a central plank of government strategy. MPs were left “stunned,” with one describing the moment as a “humiliation broadcast in real time.”
The vote did proceed—with the bill now essentially an empty shell—but the damage was done. Labour’s largest rebellion to date under Starmer’s leadership had been sparked. The final vote count—335 to 260—masked the real story: internal revolt, opposition fury, and a completely discredited policy framework.
Despite an attempt to kill second reading of the bill off, Starmer and Kendall having blinked via Stephen Timms intercession and watering the down the bill before the vote - mid debate – this was enough to see second reading still pass. News outlets like Skwawkbox and Evolve Politics published detailed lists of MPs who backed or opposed the bill, fuelling public anger and sparking backlash, urging constituents to contact their representatives.
What followed was not celebration but confusion. MPs and the media scrambled to interpret what the bill still actually contained. Even civil servants reportedly struggled to piece together its remaining purpose. The suddenness of the retraction revealed a leadership fraying under pressure, willing to gamble parliamentary dignity in exchange for a temporary political escape.
With Clause 5 withdrawn, the government’s economic case collapsed overnight. The Financial Times and MoneyWeek both confirmed that the projected £5 billion in annual savings had effectively evaporated. Treasury officials now estimate the bill will deliver no savings at all and may even cost the Exchequer £300 million more per year by 2029–30, not that I’m against spending on this, we should be supporting the disabled and the sick and if they qualify by getting through an already really onerous application process, something I know plenty about as a carer to two disabled family members, making that worse to pinch from them, the government deserves every bit of negative press it is getting.
Here's an interesting graph for those who are saying there are too many people applying and getting awarded disability. This is from Full Fact for the record and what do you notice about it? What does that spike in the graph coincide with? What did this country mishandle appallingly? The aftermath of the COVID-19 pandemic, the consequences of government incompetence once again, but this government has sought to just move the goal posts to get this down rather than addressing properly the fact that a lot more people in this country are a lot more sick because of Boris Johnson telling us all to take it on the chin.
Back to the here and now though and Labour’s screw up, the entire rationale behind the bill—its contribution to balancing the books—was now non-existent. What remains is the legislative equivalent of a ghost ship drifting with no destination and no purpose, a monument to failed economic strategy and political cowardice.
Worse still, the government now finds itself having to plug this gap in a Budget already constrained by self-imposed limits. Rachel Reeves and her stupid fiscal rules, which themselves make no sense. With Reeves having promised “no return to borrowing” and tax rises on the wealthy ruled out, the burden must therefore fall elsewhere, so what is she going to hit in the autumn statement? Education? Local councils? Housing?—or another stealth attack and tax raid on working-class communities? More cuts are guaranteed to come, but once again what is also guaranteed, is that we’ll be the ones being told to pay more, the most vulnerable are bracing for impact, taxing the donor class will remain as it will always remain for politicians like this, firmly off the table.
This is not a case of “good intentions gone awry.” It is economic vandalism wrapped in a thin veil of competence. A government that claims to be fiscally prudent has just torched billions in projected savings for absolutely no policy gain, at the expense of societies most vulnerable—and they did it live on television. He is now facing serious questions about his leadership style, his judgement, and his party management. This was not a minor backbench wobble—it was an open rebellion by MPs, who have been supported publicly by charities, campaigners, and activists who had hoped a Labour government might finally end the cruelty of the welfare state, not intensify it to a degree worse than the Tories.
To add to the humiliation, some of the most damning quotes came not from opposition MPs, but from those previously loyal. One Labour MP reportedly told The Independent that the bill “was disintegrating before our eyes.” Even usually supportive outlets described the vote as “chaotic” and “damaging.”
The incident has shattered the aura of competence that Starmer has tried so hard to carefully cultivate and what many of us on the left have known for some time, that Starmer would be out of his depth in a bird bath, never mind in number 10, is now more widely seen to be the case for many more people in the UK. The myth of steady hands at the tiller has given way to images of frantic improvisation and tactical retreats. And the damage is not just political—it is moral. The Labour Party, for many, is no longer a vessel of social justice, but an administrator of the same cruelty the Tories are known for, being no different whatsoever.
Outside Parliament, disability rights groups, unions, and left-wing campaigners have responded with renewed determination. They know this wasn’t just a bad bill—it was a declaration of war on the sick, the disabled, and the poor and there is still a way to go as the bill proceed to committee stage, where I’m expecting it to be pulled apart even further.
Meanwhile, activists are compiling lists of MPs who supported the bill, ensuring that no MP escapes accountability and that how they voted here will never be forgiven or forgotten. The narrative is shifting against Starmer’s Labour that this isn’t just bad policy—it’s betrayal.
And that sense of betrayal cuts deep. For many disabled people, this episode has been truly traumatic—reminiscent of the worst excesses of Conservative austerity that they had endured 14 long years of, but coming now from a Labour Party they had hoped might offer reprieve, only to be cruelly proven wrong once more. The betrayal is not just policy-based, but emotional, symbolic, and existential. People have ended their lives or their lives have been ended by bad social security policy more interested in cuts than supporting them within society.
Betrayal, once recognised, is not easily forgiven.
Keir Starmer came to power promising stability, seriousness, and sensible governance. Instead, his flagship welfare reform bill has delivered fiscal incoherence, political chaos, and moral bankruptcy. With its most controversial clause scrapped, its economic rationale destroyed, and its political credibility in ruins, the Universal Credit and PIP bill stands as a monument to everything wrong with this government’s approach: austerity without ideology, power without principle, and leadership without legitimacy and that will continue for as long as what is left of this gutted, but still rancid bill continues to proceed towards becoming law.
For disabled people, this close brush with bureaucratic cruelty is a reminder that even a Labour government can be a threat, the Labour right no different to the Tories. For Starmer, it is a warning that the public did not vote for technocratic callousness disguised as “tough choices.” They voted for change and he’s still not delivering that, still lying to us all as is his way.
And if this government cannot deliver that change, or even defend its own legislation competently, then its days may be numbered sooner than expected. Starmer deserves to be toast after this. If his credibility has now weakened him sufficiently off the back of this, its just a matter of time.
Certainly his war on protest, reaching a culmination this week as he seeks to proscribe Palestine Action, the only thing he seems to hate more than his authority being weakened by his own incompetence, being ordinary working class people challenging his authority full stop, readily becoming the bully and readily weaponising legislation to his own ends, seeking to proscribe a protest group for daring to protest. It’s all going very wrong now though, the former human rights barrister who ought to full well know the law is finding it working against him over this matter as you can find out all about in this video recommendation here as your suggested next watch.
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