PAT McFadden, the Chancellor of the Duchy of Lancaster, has given the strongest hint yet that taxes may have to rise in the wake of the welfare reform U-turn.

Asked if Sir Keir Starmer has lost control of his party, he said on GB News: “It’s been a very difficult process in the last couple of weeks, very impassioned debates in the Labour Party about this issue of welfare reform, as there always are.

“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’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.”

On the cost of the changes, he said: “There’s definitely a financial consequence to the decision taken yesterday.

“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.

“I’m not going to speculate about that now, but I do acknowledge there’s a financial consequence to the decision reached last night.”

Asked if the relationship between the Prime Minister and his MPs was repairable, he said: “It’s been a difficult process, but I believe in being a team.

“I chaired the election campaign that concluded almost exactly a year ago. We won that election as a team. The cabinet serves together as a team.

“Even though this has been difficult, it’s been fractious at times, we’ll move forward from this as a team as well.”

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

“We have grasped the nettle of planning reform that stopped or slowed down building in this country for years. We’re pressing ahead with new nuclear power stations that have been held up for years.

“We are starting the turnaround in the NHS, and today, by the way, we are announcing the biggest expansion in social and affordable housing for a generation, and all of that’s only possible because of the leadership of the Prime Minister and the Chancellor and the Deputy Prime Minister in putting their shoulder behind the wheel of those decisions.”