A £5bn black hole What Labour's U-turn on welfare cuts will mean for the public purse

Keir Starmer managed to avert a parliamentary defeat over his main welfare bill on Tuesday, but only by removing a central element.

- Heather Stewart

So where does the government's latest climbdown leave the public finances?

How much will the U-turns cost?

Cuts to the personal independence payment (Pip) announced at Rachel Reeves's spring statement in March were meant to save the Treasury £5bn a year.

Ministers' changes to the bill last week to try to avoid a Commons defeat - reversing some cuts to universal credit and applying the stricter Pip eligibility rules only to new claimants - had already reduced that saving to about £2bn.

After the Pip changes were stripped out of the bill completely on Tuesday, the Resolution Foundation estimates there will be no savings in five years' time - leaving a £5bn hole in the chancellor's plans.

Reeves also faces a £1.25bn cost from her decision to restore the winter fuel allowance to most pensioners - having stripped it away last year.

Between them, these U-turns will swallow most of the £10bn headroom the chancellor created for herself against her fiscal rules at her spring statement.

Is Reeves on course to break her fiscal rules?