Liz Kendall discusses welfare cuts
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Watch in full: Liz Kendall announces welfare reforms
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Pat McFadden, the Chancellor of the Duchy of Lancaster and Sir Keir Starmer’s fixer, was savaged by Radio 4’s Amol Rajan after Labour’s humiliating climbdown on its flagship welfare reform. The Government suffered a significant defeat when it was forced to drop its most controversial welfare reform proposals amid a fierce backbench rebellion.
The reversal exposed internal divisions and raised questions about Labour’s ability to deliver on key policy promises despite a commanding parliamentary majority. The reforms sought to overhaul disability benefits and tighten Universal Credit rules. Ministers had described them as “morally imperative” only days earlier. Instead, Labour announced a delayed review after pressure from MPs forced a retreat on changes to Personal Independence Payments (PIP).
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Last night's vote was passed - but not without huge concessions (Image: Parliament TV)
Mr McFadden faced a pointed interview on Today, the radio station's flagship news programme, during which Mr Rajan pressed him on the government’s failure.
He asked: “What on earth happened here?”, referring to the collapse of the welfare reform bill.
Mr McFadden responded: “It has been a difficult process… Labour MPs really care about the people involved… and it has been difficult.”
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Mr Rajan said: “How can anyone take your government seriously when, despite a majority of 165, you’ve had to totally abandon your flagship welfare reform?”
Mr McFadden said there was a “long history of ineffective leadership” on welfare reform within Labour but acknowledged: “What actually happened yesterday was that a Labour government with a majority of 165 tried to introduce some welfare reforms and completely failed to do it.”
Pat McFadden, Chancellor of the Duchy of Lancaster (Image: Getty)
When asked about the financial impact, Mr McFadden admitted: “There is a cost to what was announced yesterday… You can’t spend the same money twice, so more money spent on that means less for some other purpose.”
Mr Rajan said: “The consequence for people, their families, businesses, and employees is either taxes are going to rise or spending is going to be cut. You’re struggling to do that. So which taxes are going up?”
Mr McFadden declined to specify: “I’m not going to try to write the budget here… The budget is many moving parts.”
Mr Rajan asked: “The Prime Minister said he was ‘somewhat distracted’ and ‘somewhat lost sight’ of this. Does he come across as weak?”
Mr McFadden said: “We’re able to announce the biggest expansion in social and affordable housing for a generation precisely because we stabilized the public finances.”
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Asked about the backbench rebellion, Mr Rajan said: “If you keep buckling and crumbling under pressure, don’t you think people will keep pushing you?”
Mr McFadden replied: “We stand as a team… We won the election as a team and serve in government as a team.”
Mr Rajan asked: “Isn’t the lesson from yesterday that you’re completely incapable of getting flagship reforms through? That the Prime Minister lacks the moral power and authority to persuade his own party?”
Mr McFadden said: “The lesson can’t be that we can’t proceed with reform, because reform is essential.”
When questioned on the timing of the PIP review, Mr McFadden said: “Stephen Timms is the excellent person to do this… The review will report next November.”
Mr Rajan responded: “So this urgent moral imperative means waiting over a year?”
Mr McFadden said: “We have to take this forward in a slower pace… but the case for reform remains.”
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The interview ended with Mr McFadden defending Work and Pensions Secretary Liz Kendall, who had been forced to publicly backtrack only hours after insisting reforms would go ahead.
He said: “She is an excellent person… She cares passionately and has enormous courage.”
Labour faces renewed speculation over its tax plans after concessions to the party's welfare rebels left a ￡4.8 billion hole in Rachel Reeves's spending plans.
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The concessions, including the last-minute shelving of plans to restrict eligibility for personal independence payments (Pip), were enough to head off the Government's first Commons defeat on Tuesday evening.
But they also removed a key plank of Sir Keir Starmer's welfare reform agenda, delaying changes to Pip until after a review of the benefit not due to conclude until autumn 2026.
With no clarity on when the changes will be enacted or what they might entail, the Chancellor now faces a fiscal headache as a forecast ￡4.8 billion in welfare savings have been whittled away to nothing.