Sir Keir faced a significant rebellion over plans to cut sickness and disability benefits as part of a package he said would shave £5bn off the welfare bill and get more people into work.
Speaking to reporters on Friday, he stood by his position that the welfare system needs reform as “it doesn’t work, and it traps people”.
He added: “We need to get it right. That’s why we’ve been talking to colleagues and having a constructive discussion.
“We’ve now arrived at a package that delivers on the principles with some adjustments, and that’s the right reform, and I’m really pleased now that we’re able to take this forward.
“For me, getting that package adjusted in that way is the right thing to do, it means it’s the right balance, it’s common sense that we can now get on with it.”
The discontent threatened to derail the Universal Credit and Personal Independence Payment Bill when it comes before the Commons for a vote on Tuesday, on the week that marks a year of Starmer in government.
Asked what he would do about a “hole” in the public finances that the changes are said to leave, Sir Keir said the funding will be set out in the autumn budget “in the usual way”.
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The concessions on PIP alone will protect an estimated 370,000 people currently receiving the allowance who were set to lose out following reassessment.
Economists at the Institute for Fiscal Studies and the Resolution Foundation have both suggested that the changes could reduce savings intended in the original package by up to £3bn.
Chancellor Rachel Reeves is also under pressure to find money to pay for the U-turn on cuts to winter fuel, which followed a drubbing at the local elections in May.
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1:30
‘This week is going to haunt the prime minister,’ says Sky’s Ali Fortescue .
“I really believe that to be the case, that you end up in the right position when you talk to all of those with knowledge and experience and actually, if you want decisions to be the right ones and to last for generations to come, I believe that’s how you make the right changes.”
However, she would not guarantee the bill will pass next week.
Some 83 Labour MPs would need to rebel for the government to be defeated.
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0:43
Govt makes offer to rebels on welfare reforms
Last night Dame Meg Hillier, one of the leading rebel voices, hailed the concessions as “massive changes” to protect vulnerable people and involve disabled people in the design of future reforms.
However, not all the rebels have been satisfied with the changes, with several suggesting they would create a “two-tier system”. Sky News is aware of at least 20 MPs who currently intend to still vote against. Many others are undecided.
Many have called for a reset in relations with Downing Street, as the fallout from the rebellion threatens to cause lasting damage.
Conservative leader Kemi Badenoch criticised the U-turn, saying the government’s failure to make “minor savings” on welfare showed they were unable to deal with major issues.
And they’re off! Bridget Phillipson was first away in her two-horse race with Lucy Powell in the Labour deputy leadership stakes.
Facing a rival who was sacked from the government nine days earlier, the education secretary said the deputy leader should be a cabinet minister, as Angela Rayner was.
Launching her campaign at The Fire Station, a trendy music and entertainment venue in Sunderland, she also vowed to turn up the heat on Nigel Farage and Reform UK.
She also repeatedly called for party unity, at a time when Labour MPs are growing increasingly mutinous over Sir Keir Starmer’s dealings with sacked Washington ambassador Lord Mandelson.
Despite Ms Phillipson winning 175 nominations from Labour MPs to Ms Powell’s 117, bookmakers StarSports this weekend made Ms Powell 4/6 favourite with Ms Phillipson at 5/4.
But though the new deputy leader will not be deputy prime minister, a title that’s gone to David Lammy, Ms Phillipson praised the way Ms Rayner combined the two roles and rejected suggestions that as a cabinet minister she would be a part-time deputy leader.
“What can be achieved under a deputy leader with a seat at cabinet, just look at Angela Rayner,” Ms Phillipson told her enthusiastic supporters.
“Angela knew the importance of the role she had. There was nothing part-time about her deputy leadership.
“Last year I campaigned up and down the country to get Labour candidates elected – I’ve not stopped as education secretary – and I won’t stop as deputy leader.
“Because with local elections, and with elections in Wales and Scotland right around the corner, that role is going to be more important than ever.
“So that’s why, today, I pledge to continue Angela Rayner’s campaigning role as deputy leader.
“Continuing her mission to give members a strong voice at the cabinet table.
“Her ruthless focus on getting our candidates elected and re-elected, alongside her total determination to drive change from government. Because what mattered was not just what she believed, but that she could act on it.”
Ms Phillipson pledged to run a campaign of “hope, not grievance” and claimed the party descending into division would put the chances of children and families benefiting from Labour policies at risk.
But admitting Sir Keir Starmer’s government had made mistakes, she appealed to party members: “You can use this contest to look backward, to pass judgement on what has happened in the last year, or you can use it to shape positively what happens in the run-up to the next election.
“Back me so I can unite our party, deliver the change we want to see and beat Reform. Back me so together, we can deliver that second term of Labour government.”
Image: Phillipson with Labour supporters at her campaign launch on Sunday. Pic: PA
Starmer’s candidate vs Manchester mayor’s
As she did in a speech at the TUC conference last week, Ms Phillipson spoke about her upbringing “from a tough street of council houses in the North East all the way to the cabinet”.
At the TUC, she said she grew up – “just me and my mam” – and told how when she was nine, a man who’d burgled the house turned up at the front door with a baseball bat and threatened her mother.
Ms Powell, who enjoys the powerful backing of Labour’s ‘King of the North’ Andy Burnham, called this weekend for a change in culture in 10 Downing Street, with better decisions and fewer unforced errors.
His backing has led to the deputy contest being seen as a battle between Sir Keir’s candidate, Ms Phillipson, and that of the Greater Manchester mayor, seen increasingly as a leadership rival to the prime minister.
And like all the best horse races, with the betting currently so tight, when the result is declared on 25 October the result could be a photo-finish.
Appointing Lord Mandelson as the UK’s ambassador to the US was “worth the risk”, a minister has told Sky News.
Peter Kyle said the government put the Labour peer forward for the Washington role, despite knowing he had a “strong relationship” with convicted sex offender Jeffrey Epstein.
It is this relationship that led to Peter Mandelson being fired on Thursday by the prime minister.
Image: Lord Mandelson and Jeffrey Epstein. File pic
But explaining the decision to appoint Lord Mandelson, Business Secretary Mr Kyle said: “The risk of appointing [him] knowing what was already public was worth the risk.
“Now, of course, we’ve seen the emails which were not published at the time, were not public and not even known about. And that has changed this situation.”
Speaking to Sunday Morning with Trevor Phillips, he rejected the suggestion that Lord Mandelson was appointed to Washington before security checks were completed.
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He explained there was a two-stage vetting process for Lord Mandelson before he took on the ambassador role.
The first was done by the Cabinet Office, while the second was a “political process where there were political conversations done in Number 10 about all the other aspects of an appointment”, he said.
This is an apparent reference to Sir Keir Starmer asking follow-up questions based on the information provided by the vetting.
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21:50
‘We knew it was a strong relationship’
These are believed to have included why Lord Mandelson continued contact with Epstein after he was convicted and why he was reported to have stayed in one of the paedophile financier’s homes while he was in prison.
Mr Kyle said: “Both of these things turned up information that was already public, and a decision was made based on Peter’s singular talents in this area, that the risk of appointing knowing what was already public was worth the risk.”
Mr Kyle also pointed to some of the government’s achievements under Lord Mandelson, such as the UK becoming the first country to sign a trade deal with the US, and President Donald Trump’s state visit next week.
Mr Kyle also admitted that the government knew that Lord Mandelson and Epstein had “a strong relationship”.
“We knew that there were risks involved,” he concluded.
PM had only ‘extracts of emails’ ahead of defence of Mandelson at PMQs – as Tories accuse him of ‘lying’
Speaking to Sky News, Kyle also sought to clarify the timeline of what Sir Keir Starmer knew about Lord Mandelson’s relationship with Epstein, and when he found this out.
Allegations about Lord Mandelson began to emerge in the newspapers on Tuesday, while more serious allegations – that the Labour peer had suggested Epstein’s first conviction for sexual offences was wrongful and should be challenged – were sent to the Foreign Office on the same day by Bloomberg, which was seeking a response from the government.
But the following day, Sir Keir went into the House of Commons and publicly backed Britain’s man in Washington, giving him his full confidence. Only the next morning – on Thursday – did the PM then sack Lord Mandelson, a decision Downing Street has insisted was made based on “new information”.
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7:53
Vetting ‘is very thorough’
Speaking to Sunday Morning with Trevor Phillips, Mr Kyle said: “Number 10 had what was publicly available on Tuesday, which was extracts of emails which were not in context, and they weren’t the full email.
“Immediately upon having being alerted to extracts of emails, the Foreign Office contacted Peter Mandelson and asked for his account of the emails and asked for them to be put into context and for his response. That response did not come before PMQs [on Wednesday].
“Then after PMQs, the full emails were released by Bloomberg in the evening.
“By the first thing the next morning when the prime minister had time to read the emails in full, having had them in full and reading them almost immediately of having them – Peter was withdrawn as ambassador.”
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4:48
Government deeming Mandelson to be ‘worth the risk’ is unlikely to calm Labour MPs
The Conservatives have claimed Sir Keir is lying about what he knew, with Laura Trott telling Sky News there are “grave questions about the prime minister’s judgement”.
The shadow education secretary called for “transparency”, and told Sunday Morning with Trevor Phillips: “We need to understand what was known and when.”
Image: Laura Trott says there are ‘grave questions about the prime minister’s judgement’
They believe that Sir Keir was in possession of the full emails on Tuesday, because the Foreign Office passed these to Number 10. This is despite the PM backing Mandelson the following day.
Ms Trott explained: “We are calling for transparency because, if what we have outlined is correct, then the prime minister did lie and that is an extremely, extremely serious thing to have happened.”
She added: “This was a prime minister who stood on the steps of Downing Street and said that he was going to restore political integrity and look where we are now. We’ve had two senior resignations in the space of the number of weeks.
“The prime minister’s authority is completely shot.”
But Ms Trott refused to be drawn on whether she thinks Sir Keir should resign, only stating that he is “a rudderless, a weak prime minister whose authority is shot at a time we can least afford it as a country”.