Universal Credit and Personal Independence Payment Bill: Third Reading

Parliament passed the Universal Credit and Personal Independence Payment Bill at Third Reading on 9 July 2025, by 336 votes to 242. The bill now moves to the House of Lords. It restructures two major benefits: it raises the Universal Credit standard allowance in stages over the period 2026-27 to 2029-30, while cutting the health element of Universal Credit for new claimants with limited capability for work, and tightens the eligibility criteria for Personal Independence Payment. The bill's passage matters because it reshapes financial support for hundreds of thousands of people with disabilities or health conditions. New claimants assessed as having limited capability for work will receive a lower health top-up than existing claimants, who retain protections, as do those who are terminally ill or meet a severe conditions test. PIP eligibility is also narrowed. The government argues the higher standard allowance rate offsets the reductions; critics contend many disabled claimants will lose more than they gain. The bill passed on Labour votes alone. All 334 combined Labour and Labour and Co-operative MPs who voted split heavily in favour, with 334 ayes against 48 noes, meaning roughly 48 Labour and Labour and Co-operative MPs voted against their own government. The Conservatives opposed the bill from the other direction, voting no on the grounds the reforms do not deliver sufficient welfare savings. The Liberal Democrats, SNP, Greens, Plaid Cymru and most independents also voted no, largely in opposition to the disability benefit reductions. The result required the government to rely almost entirely on its own parliamentary majority to get the bill through.