Labour Party revolts against leader over government welfare cuts

LONDON (Reuters) - The Labour Party suffered an embarrassing split on Monday when about a fifth of its MPs defied its interim leader's call not to oppose government plans to cut welfare payments. In his first post-election budget this month, Chancellor George Osborne set out 12 billion pounds of welfare savings aimed at helping rebalance the public finances, including sharply restricting access to an expensive tax credits system which tops up the earnings of workers on low incomes. Labour, which in May suffered its worst election defeat since 1987, is in the midst of a soul searching debate about its future direction as it grapples with the reasons for its loss and seeks a new leader. Interim Labour leader Harriet Harman, who took over after Ed Miliband stepped down following the election, had faced a backlash after recommending the party's MPs abstain from a vote on the welfare cuts in parliament on Monday. The legislation passed its first hurdle after parliament voted 308 to 124 to approve it. But 48 of Labour's 232 MPs, including one of its four leadership contenders, ignored Harman's official position and voted against the measures, highlighting the difficult job awaiting its next leader in uniting the divided party. (Reporting by Kylie MacLellan)