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Chancellor Rachel Reeves has insisted that rebelling Labour MPs “know the welfare system needs reform” as the government faces a growing backlash over planned cuts.

Sir Keir Starmer is under pressure from Labour MPs, with about 40 in the Red Wall – the party’s traditional heartlands in the north of England – warning the prime minister’s welfare plan is “impossible to support” in its current form.

Dozens have thrown their support behind a letter urging the government to “delay” the proposals, which they blasted as “the biggest attack on the welfare state” since Tory austerity.

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Ms Reeves on Friday reiterated her plans for reform, insisting that no-one, including Labour MPs and party members, “thinks that the current welfare system created by the Conservative Party is working today”.

She said: “They know that the system needs reform. We do need to reform how the welfare system works if we’re going to grow our economy.”

But, the chancellor added, if the government is going to lift people out of poverty “the focus has got to be on supporting people into work”.

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“Of course if you can’t work, the welfare state must always be there for you, and with this government it will be,” she said.

The reforms, announced ahead of Ms Reeves’s spring statement in March, include cuts to Personal Independence Payments (PIP), one of the main types of disability benefit, and a hike in the universal credit standard allowance.

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Starmer faces rebellion from Labour MPs over welfare reforms

The government has claimed that changes to welfare will cut the budget by £4.8bn overall.

Separately, Downing Street refused on Friday to deny that Ms Reeves has consulted on potentially overhauling their winter fuel payment policy.

Labour’s unpopular decision to means-test the policy has taken the benefit away from millions of pensioners.

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Ministers have faced pressure from their own backbenchers to rethink the policy in the wake of last week’s local election results, which saw Labour lose the Runcorn by-election and control of Doncaster Council to Reform UK.

Asked if the chancellor has discussed the winter fuel payment in private, the prime minister’s spokesperson said they would not give a running commentary.

Pushed again, Number 10 said a “range” of discussions take place in government – which is not a denial.

However, it is worth noting that when reports emerged earlier this week that Downing Street was reviewing the policy, the government strongly pushed back on that suggestion.

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Roman Storm asks DeFi devs: Can you be sure DOJ won’t charge you?

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<div>Roman Storm asks DeFi devs: Can you be sure DOJ won't charge you?</div>

<div>Roman Storm asks DeFi devs: Can you be sure DOJ won't charge you?</div>

Current laws in the United States do not explicitly protect open source software developers and create the risk of retroactive prosecution.

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Stablecoins are really ‘central business digital currencies’ — VC

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<div>Stablecoins are really 'central business digital currencies' — VC</div>

<div>Stablecoins are really 'central business digital currencies' — VC</div>

Jeremy Kranz, founder of Sentinel Global, a venture capital firm, said investors should be “discerning” and read the fine print on any stablecoin.

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Labour deputy leadership candidate accuses opponent’s team of ‘throwing mud’ and briefing against her

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Labour deputy leadership candidate accuses opponent's team of 'throwing mud' and briefing against her

Lucy Powell has accused Bridget Phillipson’s team of “throwing mud” and briefing against her in the Labour deputy leadership race in a special episode of Sky’s Electoral Dysfunction podcast.

With just days to go until the race is decided, Sky News’ political editor Beth Rigby spoke to the two leadership rivals about allegations of leaks, questions of party unity and their political vision.

Ms Powell told Electoral Dysfunction that through the course of the contest, she had “never leaked or briefed”.

But she said of negative stories about her in the media: “I think some of these things have also come from my opponent’s team as well. And I think they need calling out.

“We are two strong women standing in this contest. We’ve both got different things to bring to the job. I’m not going to get into the business of smearing and briefing against Bridget.

“Having us airing our dirty washing, throwing mud – both in this campaign or indeed after this if I get elected as deputy leader – that is not the game that I’m in.”

Ms Powell was responding to a “Labour source” who told the New Statesman last week: “Lucy was sacked from cabinet because she couldn’t be trusted not to brief or leak.”

Ms Powell said she had spoken directly to Ms Phillipson about allegations of briefings “a little bit”.

Bridget Phillipson (l) and Lucy Powell (r) spoke to Sky News' Beth Rigby in a special Electoral Dysfunction double-header. Pics: Reuters
Image:
Bridget Phillipson (l) and Lucy Powell (r) spoke to Sky News’ Beth Rigby in a special Electoral Dysfunction double-header. Pics: Reuters

Phillipson denies leaks

But asked separately if her team had briefed against Ms Powell, Ms Phillipson told Rigby: “Not to my knowledge.”

And Ms Phillipson said she had not spoken “directly” to her opponent about the claims of negative briefings, despite Ms Powell saying the pair had talked about it.

“I don’t know if there’s been any discussion between the teams,” she added.

On the race itself, the education secretary said it would be “destabilising” if Ms Powell is elected, as she is no longer in the cabinet.

“I think there is a risk that comes of airing too much disagreement in public at a time when we need to focus on taking the fight to our opponents.

“I know Lucy would reject that, but I think that is for me a key choice that members are facing.”

She added: “It’s about the principle of having that rule outside of government that risks being the problem. I think I’ll be able to get more done in government.”

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Insider vs outsider

But Ms Powell, who was recently sacked by Sir Keir Starmer as leader of the Commons, said she could “provide a stronger, more independent voice”.

“The party is withering on the vine at the same time, and people have got big jobs in government to do.

“Politics is moving really, really fast. Government is very, very slow. And I think having a full-time political deputy leader right now is the political injection we need.”

The result of the contest will be announced on Saturday 25 October.

The deputy leader has the potential to be a powerful and influential figure as the link between members and the parliamentary Labour Party, and will have a key role in election campaigns. They can’t be sacked by Sir Keir as they have their own mandate.

The contest was triggered by the resignation of Angela Rayner following a row over her tax affairs. She was also the deputy prime minister but this position was filled by David Lammy in a wider cabinet reshuffle.

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