Starmer Takes Responsibility for Welfare U-turn, Backs Rachel Reeves to Stay On as Chancellor
Prime Minister Keir Starmer has acknowledged missteps in how Downing Street handled the government’s controversial welfare reform bill, admitting No 10 “didn’t get the process right” and affirming his personal responsibility for the fallout. His comments come after days of political turbulence, a public U-turn, and visible emotional strain on Chancellor Rachel Reeves.
Despite criticism and a potential £5bn fiscal hole created by the policy reversal, Starmer has thrown his full support behind Reeves, asserting that she will lead the Treasury into the next election and beyond.
Starmer: “We Didn’t Get It Right”
Government’s Internal Missteps Spark Public and Party Backlash
In an episode of the Political Thinking podcast with Nick Robinson, Starmer spoke candidly about the government’s handling of the welfare legislation and the emotional toll it has taken within the party.
“Labour MPs are absolutely vested in this. It matters to them to get things like this right,” he said. “And we didn’t engage in the way that we should have done.”
The prime minister’s comments follow days of criticism from Labour backbenchers over a lack of consultation on the bill—particularly over proposed cuts to Personal Independence Payments (PIP), which were ultimately shelved in a last-minute retreat to avoid parliamentary defeat.
The U-turn and Its Fallout
Welfare Bill Survives, But Not Without Cost
The government’s bill passed its second reading with a majority of 75, but only after controversial elements were dropped. This climbdown created political turbulence within Labour ranks and financial uncertainty in the markets, with short-term volatility in overnight interest rates.
Chancellor Rachel Reeves faced intense scrutiny in the House of Commons, appearing visibly emotional during Prime Minister’s Questions (PMQs) on Wednesday. Starmer, however, dismissed speculation that her tears were politically motivated.
“It was a personal matter,” Starmer insisted. “I’m not going to intrude on her privacy by talking about that.”
He reiterated:
“Rachel will be chancellor for the next election—and for many years after.”
A £5 Billion Hole in the Books
Questions Loom Over Budget Adjustments
The government’s decision to backtrack on proposed welfare cuts has left a £5 billion gap in planned public savings. Reeves now faces the formidable task of finding new sources of revenue or making alternative cuts elsewhere.
Despite fiscal pressures, Starmer has reaffirmed Labour’s manifesto commitment not to raise income tax, National Insurance, or VAT for working people.
“We didn’t breach that commitment in the last budget, and we’re not going to breach it now,” he said.
Still, with public services stretched and economic growth sluggish, ministers are now under pressure to reconfigure spending priorities—without triggering backlash from within their own party or financial markets.
Standing by Reeves
‘Tough, Capable, and Here to Stay’
Health Secretary Wes Streeting offered public support for Reeves during Thursday morning interviews, calling her “tough,” with “the courage, strength and judgment” to lead during difficult times.
“She is here to stay as our chancellor,” Streeting said on BBC Breakfast. “She will bounce back.”
That sentiment was echoed by Starmer, who praised her resilience under pressure and called the recent events a learning opportunity rather than a crisis.
“I’m the sort of person who reflects and asks: what must we do to prevent this happening again? We’ll go through that process—and we’ll come through it stronger.”
Backbench Unrest and the ‘Dressing Room’ Question
Starmer Denies Losing Control of Labour MPs
When asked whether he had “lost the dressing room,” a metaphor for losing the support of his own MPs, Starmer responded confidently:
“Absolutely not. The PLP is proud as hell of what we’ve done.”
He acknowledged frustration from Labour MPs, not over policy intent, but over process failures and lack of internal consultation. According to Starmer, such issues can obscure the government’s progress and overshadow successes.
Damage Control in Financial Markets
U-turn Briefly Shakes Confidence, But Markets Steady
The abrupt welfare reversal briefly caused unease in the financial markets, with short-term borrowing rates showing signs of volatility on Wednesday. However, Starmer’s public backing of Reeves and assurances on fiscal discipline appeared to restore investor confidence by Thursday, with rates returning to pre-U-turn levels.
Senior Treasury officials privately noted that Labour’s credibility in handling public finances remains intact—for now—but warned that any further missteps could test both market trust and party unity.
What’s Next: Learning and Moving Forward
Starmer Frames Challenges as Opportunity
In a moment of political humility rarely seen from a sitting prime minister, Starmer admitted the past week had been “tough.” But he also framed the episode as a necessary turning point.
“This, in a sense, is the toughest year,” he said. “But we’re just getting started. What we’ve already achieved in government gives me confidence we’ll come out of this stronger and more focused.”
The coming months will test Labour’s internal cohesion, its policy-making machinery, and Reeves’s ability to reconcile fiscal realism with public expectations. Starmer’s credibility as a leader who listens—and learns—may well hinge on what happens next.
