Starmer’s authority shattered as Reeves faces £5bn headache

Sir Keir Starmer has suffered a devastating hit to his authority whilst a £5bn spending headache looms for Rachel Reeves following the government’s u-turn to avoid a catastrophic defeat of its welfare bill.

Just days away from his one year anniversary in Downing Street, the PM faced the most substantial backbench rebellion of his premiership so far, despite scrapping reforms to Personal Independence Payments (PIPs).

On Tuesday night, a heavily watered-down bill passed with 335 votes in favour, with dozens of Labour MPs defying the party leadership.

The Chancellor has been wedged between disgruntled Labour MPs and bleak fiscal realities facing the UK, with the PIP u-turn alone denying the government of £4.5bn in savings.

Now, the government faces increasingly urgent questions over whether this money will come from spending cuts elsewhere or extra tax hikes.

Brutal broadcast round

Pat McFadden – a senior ally of Starmer and the chancellor of the Duchy of Lancaster – took the unenviable hot seat on the morning broadcast media round, pledging on Times Radio that the government would not raise taxes “on working people.”

McFadden told the radio station: “We will stick to the tax promises we made in the manifesto.”

The chief Cabinet Office minister did concede that there would be “financial consequences” from the u-turns following the rebellion.

He added: “The process of the last couple of weeks does have financial consequences. They will all be taken together with all the other moving parts that there are in the economy and the fiscal picture of the budget. And that will be set out at the time.”

On Radio 4’s ‘Today’ programme, McFadden was asked by Amol Rajan if this u-turn represents the steepening of a slippery slope: “If you keep getting pushed over, don’t you think that people are going to try pushing ever more?”

McFadden replied: “The lesson from yesterday should certainly not be to duck reform and changing the country.”

Rajan doubled down: “Isn’t the lesson from yesterday that you’re completely incapable of getting flagship reforms through?”

Opposition open goal

Parties on the other side of the Commons were quick to jump on the government’s capitulation at the hands of its own MPs.

Shadow chancellor Mel Stride posted on X that “Labour are making unfunded u-turns which will cost billions”.

In a letter to Rachel Reeves, Stride said: “You have said on so many occasions that you will not make unfunded spending commitments, so where is the money coming from?”

He added: “Will you raise taxes or increase borrowing?”

Reform UK has published a scathing “year of u-turns” video on the Musk-owned social media platform, badged up with a “Now That’s What I Call U-Turns” graphic.