Sofia Ferreira Santos
Live reporter

Prime Minister Keir Starmer went into this week's PMQs fresh off of a bruising internal party row, much of which played out in public.

Last night, the government's welfare bill was approved after Labour agreed to major concessions - one pf which was made during the debate.

Conservative leader Kemi Badenoch said the changes rendered the bill a "total waste of time".

The Institute for Fiscal Studies (IFS) said the bill would no longer make the intended £5bn-a-year savings by 2030, and warned tax rises were increasingly likely.

This morning, Labour's Pat McFadden insisted Labour would stick to its commitment not to increase income tax, National Insurance or VAT - but acknowledged the welfare concessions would have a "financial consequence".

Last week, Starmer's deputy, Angela Rayner, used PMQs to insist that welfare reforms would go ahead. This week saw Badenoch press on internal party divisions - and challenge Starmer to back his chancellor, who she described as looking miserable.

Starmer did not offer his reassurance in the moment. And Westminster's attention quickly turned to images of Reeves sitting behind him - cameras caught her crying from even before the leaders' exchanges.

The PM's spokesperson said afterwards that the chancellor had his "full backing" and was "going nowhere". While the chancellor's spokesperson said the cause of her upset was over a "personal matter".

We're bringing our live coverage to a close now. If you want to read more, our latest news story on this can be found here.

Politics is a uniquely exposing tradepublished at 18:08 British Summer Time 2 July

18:08 BST 2 July

Chris Mason
Political editor

The noble act of volunteering for elected office, public office comes rightly with scrutiny and difficult questions.

And it is unquestionably true that the questions for Rachel Reeves have just got even more difficult.

But it is also true as well that politicians are human beings; events rightly private shape their mood too and there is often little scope to hide.

Looking down from the press gallery of the House of Commons this lunchtime, we could all see the tears rolling down the chancellor’s cheeks.

The Conservative leader seized upon it to frame her questions about her future; the prime minister and his team keen to emphasise the strength of their relationship and desire for it to long continue.

Multiple colleagues and allies of Rachel Reeves in Parliament are blaming an altercation with the Speaker of the Commons, Lindsay Hoyle, for her tearful appearance while also pointing to a separate personal issue. The Speaker’s office have not commented.

Of course, a mix of contributory factors of differing magnitude can shape the mood of any of us.

For the prime minister and his chancellor – the duopoly at the heart of Labour’s revival and electoral success – getting the show back on the road, projecting direction, confidence and grip is now the must-have of the coming months, or the questions about each of them, even both of them, will step up.

Starmer's first year ends in shambles, but could he still turn it around?published at 17:46 British Summer Time 2 July

17:46 BST 2 July

Laura Kuenssberg
Presenter, Sunday with Laura Kuenssberg

Image source, Getty Images

"Who the hell thought this was a good idea?" a Labour insider spluttered, incredulous, even two weeks ago, that No 10 would schedule a vote to take benefits from the disabled as the anniversary of their election victory approached. "What genius!" they mocked.

They predicted drama, although not a disaster like this.

The gory consequences of the decision to try and change the law on welfare this week are there for all to see.

No 10 might have been hanging out the bunting, preparing to celebrate a year in office. Instead, for a few days Parliament has looked just as much of a shambles as during the head-spinning days of incessant Tory turmoil.

In this fevered week, Labour has been failing its basic mission, to look like a capable government. And the prime minister's authority has been given a hefty kick.

Westminster has rushed to its default of recent years - salivating over spats and splits, chaos and confusion. But whether that enrages or entertains you, the bald facts here matter to everyone: a government that can't pass laws in Parliament can't effectively wield power. Prime ministers that can't effectively wield power can't get things done.

So can Labour move on from this almighty mess?

• Read Laura's full InDepth analysis

Aside from reaction to last night's vote on Labour's watered-down welfare reform bill, today has largely been dominated by the chancellor's tearful appearance at Prime Minister's Questions (PMQs).

Reeves was sitting in the background during the usual leaders' exchanges - here's how it unfolded:

• Reeves was, as normal, seated next to Starmer at PMQs, and looked visibly upset from the beginning
• Badenoch, as expected, launched straight into the U-turn on welfare reform, and how it will impact the Treasury’s sums - at one point commenting that Reeves looked “absolutely miserable”
• The Tory leader then asked if Reeves would still be in post at the next election - a reassurance Starmer did not provide in the moment
• After PMQs had finished, Starmer’s spokesperson said the chancellor has the PM’s "full backing” and is “going nowhere”
• A spokesperson for Reeves said she was upset over a "personal matter" - but didn't say what
• According to the BBC's Henry Zeffman, the chancellor's allies blamed an altercation with the Speaker of the Commons Lindsay Hoyle - accusing him of having been abrupt with her in a meeting
• The Speaker’s office has not commented on that, and neither has Reeves

Brian Wheeler
Political reporter

Slightly surreal scenes in Downing Street just now as a grinning Keir Starmer posed for pictures with Formula One cars as reporters shouted questions at him about Rachel Reeves.

Journalists routinely shout questions at prime ministers without really expecting an answer.

And it was no different today, with Starmer disregarding questions about why Reeves appeared to be so upset at Prime Minister’s Questions earlier and whether he had spoken to her about it.

This is the subject of much speculation in Westminster - Reeves’s spokesperson has insisted it was a “personal matter”.

Quite what F1 president Stefano Domenicali and the assembled group of drivers and workers – there to celebrate the sport’s 75th anniversary ahead of this weekend’s British Grand Prix – made of it, that's anyone’s guess.

As we've been reporting, several of Rachel Reeves's allies are blaming an altercation with the Commons Speaker for her tearful appearance in the chamber.

The two reportedly interacted before PMQs, which our chief political correspondent Henry Zeffman says is thought to have been over a moment during Treasury Questions yesterday, in which Hoyle asked Reeves to give shorter answers.

No-one who the BBC has spoken to is claiming to have witnessed the reported interaction today personally.

The chancellor's team has declined to comment and we have also approached the Speaker's office for comment.

It's not clear what moment in the Commons yesterday is being referred to.

It's not unusual for the Speaker to hurry ministers when giving answers during the topical section of departmental questions in the Commons. The Speaker did so twice yesterday when Reeves was giving answers - the video below shows the second of those moments.

A closer look at Starmer's claim on business confidencepublished at 15:15 British Summer Time 2 July

15:15 BST 2 July

By Ben Chu

During PMQs earlier, the prime minister said “business confidence is the highest for nine years".

That is correct if you look at one survey - the Lloyds Business Barometer - but other indicators of UK business confidence show a weaker picture.

The latest Lloyds release, external shows 64% of 1,200 businesses surveyed in June 2025 reported confidence was higher and 13% said it was lower, giving a net “balance of confidence” figure of 51% for the month, the highest since 2015.

However, a business economic confidence index of 449 firms compiled by the Institute of Directors (which ranges between a maximum of 100 and a minimum of -100) fell back to -53 in June 2025.

The index had been in positive territory when Labour came to power in July 2024, external.

The Bank of England’s network of regional agents also points to a subdued, rather than buoyant, picture of business confidence.

The agents’ report for the second quarter (April to June) of 2025, external said "several uncertainties are weighing on the confidence needed to commit to future investment plans".

Faisal Islam
Economics editor

The tearful scenes in the House of Commons at lunchtime were noticed in the financial markets.

The effective rate for 10-year government borrowing shot up a material amount of over 0.1%, just after PMQs, at the sight of a visibly upset Reeves, with the PM not specifically backing her.

It sparked speculation about her position in government to which markets reacted, sending borrowing costs soaring, in a way not seen for other countries. Sterling fell notably too, down 1% against the dollar, although it has recently been trading very strongly.

At first, when Number 10 emphasised full support for Reeves the yields fell back a little. The increase then resumed, and a few moments ago the 10-year yield was 0.13% points higher than at the start of PMQs.

Some parallels were drawn with the Truss mini budget. The rise, at least at first, was caused by the suggestion the chancellor might step down, which suggests she retains market credibility.

These yields have stayed higher this afternoon, however, which might indicate wider concerns about the government’s Budget maths are starting to materialise.

Henry Zeffman
Chief political correspondent

Image source, House of Commons

Multiple colleagues and allies of Rachel Reeves in Parliament are blaming an altercation with the Speaker of the Commons, Lindsay Hoyle, for her tearful appearance in the House of Commons.

Several have accused him of having been abrupt with the chancellor in a meeting before Prime Minister's Questions.

It is thought to have been about an interaction they had during Treasury questions yesterday in which Hoyle asked her to give shorter answers.

However no-one who the BBC has spoken to is claiming to have witnessed the interaction personally. The chancellor's team has declined to comment.

The Speaker's office has been approached for comment.

Image source, PA Media

Stephen Flynn, the SNP Westminster leader, has put out a supportive message to Reeves on social media after she was seen crying in the Commons during PMQs.

On social media, he says: "Like almost all MPs I don’t know why the Chancellor was upset in the Chamber today, but I do hope she is okay and back to her duties this afternoon.

"Seeing another person in distress is always very difficult, and we are wishing her well."

"We should find out what's going on," Badenoch's spokesperson says after Reeves was seen in tears during PMQs.

Reeves' spokesperson says she was upset over a "personal matter" - and No 10 has insisted the chancellor is "going nowhere".

But Badenoch's spokesperson says that the "personal matter doesn't really clear it up" as "you normally tell people what the personal matter is".

Shortly after sparring with Starmer in the Commons, Badenoch took to social media, saying: "Today the Prime Minister refused to back his Chancellor, leaving her humiliated.

"She is the human shield for his expensive U-turns."

As we've been reporting, and as our political editor Chris Mason noted earlier, Rachel Reeves appeared upset during PMQs.

We reached out to her team to ask about this and, since then, a spokesperson for the chancellor said she was upset over a "personal matter".

"It’s a personal matter, which - as you would expect - we are not going to get into," a statement says.

"The chancellor will be working out of Downing Street this afternoon."

Starmer's press secretary has released a statement saying Reeves is "going nowhere" and she has the prime minister's "full backing".

It follows a moment at PMQs when Badenoch pressed the prime minister on the chancellor's future, asking if she would be in post at the next election.

The prime minister didn't directly answer Badenoch's question but instead listed a number of actions taken by Reeves and his government.

Could welfare reforms cost 'millions'?published at 13:08 British Summer Time 2 July

13:08 BST 2 July

By Tom Edgington

During her exchanges with Keir Starmer, Conservative leader Kemi Badenoch claimed that the government’s welfare concessions were "going to cost millions".

"This is the first PM in history to propose a bill to save money who ended up with a bill that costs money," she said.

This claim is supported by analysis from some economists, including Paul Johnson from the Institute for Fiscal Studies who said the changes "could even end up costing a few tens of millions", external.

How is this possible?

Under the government’s original plans, the reform package was expected to save around £5bn a year by 2030 but this figure has been whittled down after a series of concessions to Labour MPs.

The tightening of the personal independence payment (Pip) eligibility rules was expected to save £2.6bn by 2030, according to the IFS’s Tom Waters.

But this change is now subject to a government review - meaning ministers are left with just a projected £1.7bn saving from cutting the health element of universal credit.

However, the government has also promised to raise basic universal credit, at a cost of £1.8bn, Waters adds.

Image source, House of Commons

Labour's welfare U-turn provided fertile ground for this morning's PMQs sparring session between Starmer and Badenoch. Here's what we heard:

• As anticipated, Badenoch immediately dived into yesterday's vote on welfare reform, asking Starmer to tell the House exactly how much money the bill will now save
• Starmer doubled down on the bill, saying it is consistent with the principles of reform he has set out
• But the leader of the opposition said the bill had been “completely gutted” and will now cost money, rather than save it
• The pair then sparred on who is to blame for the state of the welfare system, with Badenoch suggesting sickness benefits are set to rise by £100bn and Starmer saying his actions are intended to clean up what he described as the Tories' mess
• Badenoch challenged Starmer to rule out tax rises to pay for the welfare concessions, but the PM did not directly engage with the question
• The Conservative leader then shifted her focus onto the position of Chancellor Rachel Reeves, who she declared looked miserable in her spot behind Starmer - Reeves waved this away

Joshua Nevett
Reporting from the House of Commons

As PMQs concluded, Rachel Reeves was met and comforted by her sister Ellie - another Labour MP and chair of the party - as they left the chamber together.

As our political editor Chris Mason said, the chancellor appeared upset at the session and we have asked her team about this.

Joshua Nevett
Reporting from the House of Commons

Image source, House of Commons

Green MP Adrian Ramsay asks Starmer whether the government will scrap the two-child benefit cap, after his climbdown on welfare.

Starmer says: “I don’t think I’ll be listening to him or his party.”

Will he listen to MPs in his own party, though?

Getting rid of the two-child benefit cap is something many Labour MPs have also been calling for. Do they smell blood after the welfare concessions and other U-turns?

Prime Minister's Questions has now ended - stick with us for recaps and analysis.

Image source, House of Commons

Stephen Flynn from the SNP has asked Starmer whether, after promising to end the chaos in his victory speech last year, the public still believes him.

Starmer replies that in his first year, Labour has achieved more than the SNP has managed in 20 years - including creating four million extra NHS appointments.

Lib Dem leader Ed Davey just mentioned the Timms review in his question to the prime minister today. Here's the background:

It's a planned review of the personal independence payment (Pip) assessment, to be led by disabilities minister Stephen Timms and "co-produced" with disabled people.

Pip assessments use a points-based system to determine eligibility, the parameters of which are due to change in November 2026 under government plans - you can find a break down in our explainer.

Any recommendations from the review would be implemented "as soon as possible" following its completion, Kendall told MPs on Monday.

She added that it would not be "driven by an objective of making savings", but "making sure that this really vital benefit is fair and fit for the future".