Rachel Reeves will “after all” be chancellor in six months’ time, a senior ally of Sir Keir Starmer has mentioned, regardless of final evening’s humiliating showdown over welfare cuts.
Pat McFadden, the chancellor of the Duchy of Lancaster, admitted there can be a “value” to the federal government’s choice to successfully neuter its welfare invoice, which was supposed to avoid wasting Ms Reeves round £5bn however now leaves her with an estimated £5.5bn black gap.
Chatting with Kamali Melbourne on Sky Information’ Breakfast Mr McFadden acknowledged it had been a “robust” few weeks for the federal government because it confronted down its backbenchers over proposals to shake up the welfare system.
Politics latest: Tories go on the attack against Rachel Reeves
The prime minister’s watered-down Common Credit score and Private Unbiased Cost Invoice, geared toward saving £5.5bn, was backed by a majority of 75 in a tense vote on Tuesday evening.
A complete of 49 Labour MPs voted in opposition to the invoice – the most important insurrection in a main minister’s first yr in workplace since 47 MPs voted in opposition to Tony Blair’s Lone Mother or father profit in 1997, in response to Professor Phil Cowley from Queen Mary College.
Ms Reeves has borne a variety of the criticism over the dealing with of the vote, with some MPs believing that her strict method to fiscal guidelines has meant she has approached the ballooning welfare invoice from the standpoint of attempting to make financial savings, quite than getting folks into work.
Consultants have additionally warned that the welfare U-turn, on prime of reversing the reduce to winter gas, implies that tax rises within the autumn are extra possible.
Requested whether or not he believed Ms Reeves would nonetheless be in her job within the subsequent six months, Mr McFadden replied: “In fact she’s going to. She’s doing a wonderful job. We take these selections as a group. We stand as a group, and we go ahead as a group.”
The senior cupboard minister sought to downplay the chaotic scenes that unfolded within the Commons final evening, when the federal government pulled probably the most controversial parts of the invoice, leaving MPs to vote on just one aspect – chopping common credit score (UC) illness advantages for brand spanking new claimants from £97 every week to £50 from 2026/7.
Govt makes last-minute concession on welfare invoice
Simply 90 minutes earlier than voting began on Tuesday night, disabilities minister Stephen Timms announced the last of a series of concessions made as dozens of Labour MPs spoke of their fears for disabled and sick folks if the invoice was made legislation.
In a serious U-turn, he mentioned adjustments in eligibility for the private independence cost (PIP), the principle incapacity cost to assist pay for additional prices incurred, wouldn’t happen till a assessment he’s finishing up into the profit is printed in autumn 2026.
An amendment brought by Labour MP Rachael Maskell, which aimed to forestall the invoice progressing to the subsequent stage, was defeated however 44 Labour MPs voted for it.
Conservative shadow chancellor Mel Stride known as the vote “farcical” and mentioned the federal government “ended up on this horrible scenario” as a result of they “rushed it”.
He warned the markets “may have observed that on the subject of taking harder selections about controlling and spending, this authorities has been discovered wanting”.
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Mr McFadden argued it was not “fully a foul factor that Labour MPs really feel passionately about this situation” regardless of it inflicting probably the most damaging insurrection of the prime minister’s management to this point.
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“There is a lengthy historical past of Labour MPs feeling passionately about this situation. However the place we have to, in the long run, is the second studying of the invoice going via and the reforms to PIP, which had been probably the most contentious a part of this taken ahead in slower time now, via a assessment led by my colleague Stephen Timms.”
He added: “There’s a monetary consequence to the choice – there isn’t any denying that.
“However that is additionally about altering incentives, getting a greater system, getting extra help for folks, who’re on the lookout for work.
“There are vital key parts of the welfare reform bundle that had been handed within the vote final evening that had been nonetheless priceless. And we are going to take that ahead.”
