Chancellor Rachel Reeves faces mounting backlash from Labour MPs as emergency £500m welfare cuts threaten to plunge 250,000 more into poverty — including 50,000 children

Rachel Reeves, Labour’s Chancellor of the Exchequer, had a difficult job to begin with: sell welfare reform to a sceptical public and a restless parliamentary party. But after Wednesday’s dramatic climbdown and a scramble to plug a multi-billion pound budget gap, her task has become politically combustible.

Forced to announce deeper and hastily revised welfare cuts after the Office for Budget Responsibility (OBR) declared her original savings plan overly optimistic, Reeves now finds herself defending a policy that not only cuts deeper than planned — but will also save less than advertised.

The new figures make for grim reading: an estimated 250,000 more people — including 50,000 children — will be pushed into relative poverty by 2030. The Department for Work and Pensions’ own impact assessment revealed the figure just as Reeves took to the Commons to justify the changes, insisting the government was “not prepared to write off an entire generation.”

The numbers, however, are not helping to calm nerves among Labour MPs. Many were already on edge about targeting working-age disabled people for savings. Now they’ve been told the lion’s share of cuts — approximately £3.4 billion — will come from exactly that group, despite the government’s broader pitch about returning people to the workforce.

In a defiant speech, Reeves pointed the finger at the previous Conservative government, claiming Labour had “inherited a broken system.” But her explanation fell flat for many on her own benches.

“I want a society that looks after our most vulnerable people, and the statement I’ve just listened to has some appalling cuts that disabled people will be the victims of,” said Scottish Labour MP Brian Leishman. He vowed to vote against what he called “horrendous cuts.”

The policy revisions come after the OBR downgraded the expected savings from Labour’s original welfare reform package, unveiled just last week. That prompted a frantic response from Treasury officials, who cobbled together a new £500 million savings plan that includes freezing certain Universal Credit incapacity payments for new claimants until 2030 and even cutting weekly rates from £107 to £106 by 2029 — all in the name of fiscal credibility.

But those revisions only got Reeves part of the way. Instead of the £5 billion headline savings figure previously billed, forecasters now believe Labour’s plan will yield just £3.4 billion.

Adding insult to injury, the OBR publicly rebuked the government for submitting information about the changes “late and without sufficient detail.” For Reeves, who had once vowed to restore integrity to economic policymaking after the chaos of Liz Truss’ mini-budget, the criticism is especially damaging.

Truss herself could not resist a swipe. Posting on X, she mocked Reeves with a gloating “I wonder who they could have listened to?” — punctuated by a thinking emoji.

Government aides are staying away from open confrontation with the watchdog, but one senior official privately admitted, “It’s not great, but we’re boxed in. There’s no headroom.”

Indeed, what has enraged many critics is the sense that these cuts were stitched together not on the basis of careful policy thinking but as a last-minute fix to stay “just on the right side of the line,” as economist and former Labour adviser Duncan Weldon put it.

The impact is stark and deeply personal. Changes to Personal Independence Payments (PIP), which support those with extra care or mobility needs, will disqualify an estimated 370,000 existing recipients. Another 430,000 potential future claimants will no longer be eligible under the redefined criteria.

Even worse, carers are being hit too. Liberal Democrat leader Ed Davey, who has long spoken about his experience caring for his disabled son, condemned the loss of carer’s allowance for 150,000 people. He called it “a double whammy to the most vulnerable, hitting disabled people who cannot work while slashing support for the loved ones who care for them.”

Across the country, around 3.2 million families will be worse off — losing an average of £1,720 per year by the end of the decade. Government sources attempted to soften the blow by pointing out that 3.8 million others will see modest gains, but the political damage has already been done.

With a commanding majority in the Commons, Labour’s leadership might hope they can weather the storm. But the dissent within their own ranks is growing louder, and this episode is rapidly turning into Reeves’ most serious political test yet.

“She’s tried to cast herself as the anti-Truss, the sober and responsible steward of the economy,” one Labour backbencher said. “Now she’s gambling with the livelihoods of sick and disabled people, all to satisfy a spreadsheet.”

For many in Labour, it’s not just the numbers — it’s the principle. And on that score, Reeves may have just triggered a backlash that numbers alone can’t fix.

THE GUARDIAN

Blackpool, already one of the UK’s poorest towns, is facing growing hardship following welfare cuts in the government’s spring statement. Universal credit claimants like Owen Sandford say they’re struggling to survive amid rising living costs. Rachel Reeves’s plan includes freezing or reducing the health element of universal credit and reviewing Personal Independence Payments (PIP), sparking fear among disabled residents. Local charities report a surge in distressed calls, including from those in mental health crisis. Blackpool has the UK’s highest rates of mental health conditions and disability benefit claims, with life expectancy among the lowest nationally. Churches and food banks, such as Layton Methodist and The Big Food Project, are overwhelmed by demand. Volunteers witness families skipping meals so children can eat. As more rely on emergency food support, concerns grow that grassroots aid may become the only safety net left. Poverty now affects young and old across the town.

BBC

Growing discontent is brewing within Labour as MPs express anxiety over welfare cuts unveiled in the Spring Statement, particularly those affecting disabled people. Despite polls showing support for reducing the benefits bill, backlash is mounting due to projected increases in poverty. For the first time, some Labour MPs have vowed to oppose the changes, while others are proposing alternative revenue-raising measures like wealth and land taxes. Chancellor Rachel Reeves faces criticism even from moderates and former allies, as her strict fiscal rules come under scrutiny. Critics argue that Reeves’ stance mirrors austerity and ignores shifting international norms, such as Germany’s recent decision to exempt defence and infrastructure from debt limits. While Reeves maintains that her rules are essential for economic stability, many within the party now argue for more flexibility amid weak growth projections. The debate exposes fractures in Labour, challenging assumptions of unified backing for Reeves’ economic conservatism and long-term spending restraint.