Since taking office nine months ago Sir Keir Starmer has weathered party rows about winter fuel payments, the two child benefit cap, WASPI women, airport expansion and cuts to international aid.

All of these decisions have been justified in the name of balancing the books – filling that notorious £22bn black hole, sticking to the fiscal rules, and in the pursuit of growth as the government’s number one priority.

But welfare reform feels like a far more existential row.

Health Secretary Wes Streeting argued on Sunday Morning With Trevor Phillips that the current system is “unsustainable”.

Ministers have been making the point for weeks that the health benefits bill for working-age people has ballooned by £20bn since the pandemic and is set to grow by another £18bn over the next five years, to £70bn.

But the detail of where those cuts could fall is proving highly divisive.

One proposal reportedly under consideration has been to freeze personal independence payments (PIPs) next year, rather than uprating them in line with inflation.

Charities have warned this would be a catastrophic real-terms cut to 3.6 million people.

Concerned left-wing backbenchers are calling on the government to tax the rich, not take from the most vulnerable.

The Sunday Times and Observer have now reported that Work and Pensions Secretary Liz Kendall has dropped the idea in response to the backlash.

Read more:
Streeting denies Labour ‘changing into Tories’
Planned PIP freeze set to be scrapped – reports
What cuts could be announced?

Wes Streeting denied reports of a cabinet row over the plan, insisting the final package of measures hasn’t yet been published and he and his cabinet colleagues haven’t seen it.

Not the final version perhaps – but given all backbench Labour MPs who were summoned to meetings with the Number 10 policy teams for briefings this week, that response is perhaps more than a little disingenuous.

In his interview with Sir Trevor Phillips, he went on to make the broader case for PIP reform – highlighting the thousand people who sign up to the benefit every day and arguing that the system needs to be “sustainable”, to “deliver for those that need it most” and “provide the right kind of support for the different types of need that exist”.

To me this signals the government are preparing to unveil a tighter set of PIP eligibility criteria, with a refocus on supporting those with the greatest needs.

Changes to incapacity benefit to better incentivise working – for those who can – are also clearly on the cards.

The health secretary has been hitting out at the “overdiagnosis” of mental health conditions, arguing that “going out to work is better for your mental and physical health, than being spent and being stuck at home”, and promising benefit reforms that will help support people back to work rather than “trapped in the benefits system”.

Turning Tory?

Starmer said this week the current welfare system couldn’t be defended on economic or moral grounds.

The Conservatives don’t disagree.

Before the election, they proposed £12bn in cuts to the welfare bill, with a focus on getting people on long-term sickness back to work.

This morning, shadow education secretary Laura Trott claimed Labour denied that welfare cuts were needed during the election campaign and had wasted time in failing to include benefits reform in the King’s Speech.

“They’re coming to this chaotically, too late and without a plan,” she said.

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

Notwithstanding the obvious critique that the Tories had 14 years to get a grip on the situation – what’s most striking here is that, yet again, the Labour government seems to be borrowing Conservative clothes.

When challenged by Sir Trevor this morning, Streeting denied they were turning Tory – claiming the case for welfare reform and supporting people into work is a Labour argument.

But, from increasing defence spending and cutting the aid budget to scrapping NHS England, there’s a definite pattern emerging.

If you didn’t know a Labour administration was in charge, you might have assumed these were the policies of a Conservative government.

It’s a strategy which makes many of his own backbenchers deeply uncomfortable.

But it’s doing a good job of neutering the Tory opposition.

The new Sky News and Politico podcast Politics At Sam And Anne’s launches today, with Anne McElvoy replacing Jack Blanchard as Sam Coates’s co-host.

The political podcast will be available from 7.30am Monday to Thursday and will see Coates, Sky News’ deputy political editor, and McElvoy, Politico’s executive editor, unpack everything there is to know about the day ahead in Westminster.

Each instalment of the award-winning podcast will give audiences the latest insight into British politics in no more than 20 minutes.

The podcast originally launched in September 2023 with Jack Blanchard – Politico’s former UK editor, and now author of Politico’s DC Playbook.

👉Listen to Politics At Sam And Anne’s on your podcast app👈

McElvoy’s arrival comes after a successful year for the podcast as it was recently recognised at the inaugural Political Podcast Awards and credited for its “must-know political insight”.

Coates, who won Presenter of the Year at the 2025 Political Podcast Awards, said: “Having Anne on board as my new full-time co-host is hugely exciting.

“With her phenomenal multi-decade background in domestic and international affairs, Anne is best in class at dissecting how events around the world are shaping Westminster.

“By combining Politico’s incredible depth and Sky’s ability to cut through the noise, we are well placed to continue providing unrivalled analysis and the latest scoops to our informed Westminster audience.”

McElvoy said: “Sam’s boundless energy, deep cross-party knowledge and a shared delight in informed conversation on the topics and characters shaping politics make even our early morning recordings fun.

“Our mission remains delivering the unmissable first podcast of the day for and about Westminster. We will explore the news moments that matter, offer our own insights and spontaneous exchanges and preview events that shape our political world.”

David Rhodes, executive chairman of Sky News, said the podcast was “the go-to source for people who work in Westminster and beyond”.

He said: “It provides an unparalleled service, giving a community of highly engaged listeners the full story, first each morning on what’s happening in politics.”

A freeze to disability benefits will not go ahead following pressure from Labour backbench MPs, Sky News understands.

The government had been looking at freezing the personal independence payment (PIP) next year so it did not rise with inflation as part of a drive to cut down the ballooning welfare budget.

However, following pressure from Labour backbenchers over the past week, this has now been taken off the table, Sky News understands.

The proposal had been set to save about £5bn as Chancellor Rachel Reeves searches for savings after losing £9.9bn of fiscal headroom (the amount she could increase spending or cut taxes without breaking her fiscal rules) since the October budget due to a poor economy and geopolitical events.

Politics latest: Minister plays down level of rebellion

PIP is a payment of up to £9,000 a year for people with long-term physical and mental health conditions and disabilities to help with extra living costs.

However, the government is expected to make qualifying for PIP more difficult when Work and Pensions Secretary Liz Kendall reveals plans on Tuesday.

Sky News’ deputy political editor Sam Coates, on the Politics At Sam and Anne’s podcast, said the Treasury is also expected to abolish the Work Capability Assessment, which determines whether someone is fit or not to work and to then receive disability payments.

The government has described the system as “dysfunctional” as those “not fit for work” do not receive employment support or further engagement after the assessment, which could lock them out of future work altogether.

Explainer: Which benefits could be cut?

Sir Keir Starmer has made cutting the welfare budget a key project as spending on sickness benefits soared to £65bn last year – a 25% increase since the year before the COVID pandemic – and is expected to rise to £100bn before the next general election in 2029.

The number of people in England and Wales claiming either sickness or disability benefit has soared from 2.8 million to about 4 million since 2019.

However, many Labour MPs are uncomfortable with cutting benefits for disabled people.

Ms Kendall had been expected to announce welfare cut plans last week but this was delayed by displeasure from backbenchers, with the government taking the unusual step of asking all 404 Labour MPs to attend “welfare roundtables” in Downing Street last week.

Greater Manchester’s Labour mayor, Andy Burnham – a former health secretary – agreed the benefits system “needs a radical overhaul” but wrote in The Times: “I would share concerns about changing support and eligibility to benefits while leaving the current top-down system broadly in place. It would trap too many people in poverty.”

Will government follow through on tough talk despite backbench concerns?

Mhari Aurora

Political correspondent

@MhariAurora

Tomorrow, the government will publish its plans to cut the welfare budget, but it’s the Labour benches that are likely to cause the most havoc.

This mini u-turn on freezing PIP will placate some Labour MPs nervous about the unintended consequences of the welfare crackdown and how it may affect disabled people.

On Sky News Breakfast today former Shadow Chancellor John McDonnell welcomed the news, and said he understood the pressures the Treasury was facing.

His muted tone could be an indication the government’s efforts to persuade backbenchers of the merits of the plan – by inviting them to Downing Street to speak their minds and be reassured the most vulnerable would be protected – is taking effect.

However, despite a relatively understanding tone from Mr McDonnell, he also warned Reeves’s plans may turn out to create more problems than it will solve in the long run.

Mr McDonnell accused the government of not understanding the world has changed, hinting the chancellor ought to follow Germany’s lead, break her fiscal rules and blame the policy pivot on unprecedented global events.

Greater Manchester mayor Andy Burnham also attacked the government’s plans to crack down on the benefits bill, but Treasury minister Emma Reynolds launched the fightback on Sky News Breakfast, insisting the government had a duty to reform the welfare system “according to our values”.

Reynolds argued there is dignity in work and that reforms were needed as “something has gone seriously wrong under the Tories”, arguing the cuts chime with Labour ideology.

And Health Secretary Wes Streeting – the self-proclaimed Tory whisperer – has hardened his rhetoric even further, claiming the over-diagnosing of mental health problems is in part to blame for the ballooning benefits bill.

This hardening of the government’s language is a clear attempt to talk tough, but will the government be able to follow through on the action the Treasury is desperate to see while many Labour backbenchers remain unconvinced Starmer has his priorities in the right order?

Read more:
Why Starmer’s backbenchers are deeply uncomfortable?
Streeting denies Labour turning into Tories over disability benefit cuts
UK and global economic forecasts slashed

Treasury minister Emma Reynolds played down the level of discontent over plans to freeze PIP, as she told Sky News: “It is absolutely everyday business that we should have discussions with backbenchers, meetings between our MPs and ministers happen all day, every day.

“So this isn’t something that is any different, but we’re determined to strike the right balance here.”

She added there will “always be a safety net for the most vulnerable” and pointed out Labour created the welfare state in 1945, but it needs to be “more sustainable”.