UK tax rise likely after rollback in welfare bill

Senior financial analysts have warned that tax rises in the United Kingdom now look increasingly likely after the government was forced to withdraw a major element of its welfare reform legislation in the face of opposition from its own members of Parliament.

The bill, relating to universal credit and personal independence payments, known as PIPs, passed its second reading in the House of Commons on Tuesday by 335 votes to 260 — a majority of 75 — but 49 Labour MPs voted against it.

It had been hoped that the PIPs reform would save up to 5 billion pounds ($6.8 billion) a year, but the concessions offered by the government to stave off an even bigger rebellion mean that money is now wiped out, leaving Chancellor of the Exchequer Rachel Reeves with a major headache.