The Chancellor of the Duchy of Lancaster has indicated that tax increases could be necessary after the Government reversed course on disability benefit reforms.

Speaking to GB News, Pat McFadden acknowledged the financial impact of abandoning controversial changes to Personal Independence Payment (PIP).

"There's definitely a financial consequence to the decision taken yesterday," he stated.

Prime Minister Sir Keir Starmer's benefits bill passed the second reading on Tuesday, with 335 MPs voting for and 260 voting against, a majority of 75.

Pat McFadden has warned Britons of 'financial consequences' in wake of the benefits bill row

McFadden was candid about the implications for public finances: "If you're not saving money from this, it has to come from somewhere.

"All of that will have to be taken into the round, along with all the other government expenditure pressures, when we reach a Budget later in the year."

McFadden explained that the Government had decided to proceed with Universal Credit reforms while separating out the more controversial PIP changes.

"Where we eventually got to last night was taking forward those elements of Universal Credit reform that were in the bill, but taking that very contentious issue of Pip reform and giving that into a review led by my colleague Stephen Timms, the Disability Minister," he said.

Changes to PIP will now be postponed until the Timms review reports back in autumn 2026

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The minister praised Timms as the right person to lead the review: "He's an excellent person to do this, a very experienced, deeply compassionate politician, and we'll have to take that forward in a different way."

"I'm not going to speculate about that now, but I do acknowledge there's a financial consequence to the decision reached last night," he told GB News.

The admission comes after what McFadden described as "very impassioned debates in the Labour Party about this issue of welfare reform, as there always are."

When questioned about whether Sir Keir Starmer had lost control of his party, McFadden defended the Prime Minister's leadership: "It's been a difficult process, but I believe in being a team," he responded.

McFadden told GB News that Labour will 'move forward from this as a team'

Despite acknowledging the challenging nature of recent debates, McFadden emphasised unity: "Even though this has been difficult, it's been fractious at times, we'll move forward from this as a team as well."

He argued that reconsidering policies demonstrated strength rather than weakness.

He said: "I think reflection on things is not a sign of weakness, it's a sign of strength. And there are many nettles being grasped."

McFadden highlighted several Government achievements, including planning reform, progress on nuclear power stations, NHS improvements, and "the biggest expansion in social and affordable housing for a generation."