Starmer Emerges From Welfare Bout Weaker and Billions in Red

WATCH: The government decided to drop the most contentious part of planned welfare changes. Lizzy Burden reports.Source: Bloomberg

Keir Starmer dramatically abandoned his flagship welfare reforms to avoid a historic defeat, leaving the UK prime minister’s authority badly damaged and his government facing a widening fiscal hole to fill.

The government made a last-ditch decision Tuesday to drop the most contentious part of planned welfare changes, which would have restricted benefit payments to some disabled people from next year and had caused widespread anger among Labour MPs. While that allowed Starmer to avoid a humiliating loss to rebels in his own party, it came at the cost of giving up all of the savings initially sought from the reforms.