Overview

• The government has guaranteed that current Personal Independence Payment recipients and Universal Credit health-element claimants will maintain their existing entitlements, with reforms applying solely to new claimants.
• The concessions slash the bill’s projected £5 billion annual savings by up to £2 billion, creating a funding shortfall that Chancellor Rachel Reeves may need to address.
• More than 120 Labour backbenchers signed a reasoned amendment threatening to block the Universal Credit and PIP Bill at its second reading on Tuesday.
• Downing Street declined to rule out future tax increases as ministers weigh options to plug the gap under the party’s tight fiscal rules.
• The climbdown follows days of intense negotiations over disability and welfare cuts, exposing leadership tensions and testing government unity ahead of the Commons vote.