In a move that could provoke the biggest revolt Keir Starmer’s premiership so far, benefits will be targeted for massive savings ahead of the Chancellor Rachel Reeves’s Spring Statement
Keir Starmer’s government is expected to announce plans to axe billions from Britain’s welfare bill in the coming weeks.
In a move that could provoke the biggest revolt of his premiership so far, benefits will be targeted for massive savings ahead of the Spring Statement. Some Labour MPs are already warning the PM against “draconian” cuts to benefits while disability charities have raised the alarm over “catastrophic” impacts.
Work and Pensions Secretary Liz Kendall has for months been drawing up reforms to reduce the number of people on health-related benefits and get them back into work. She told a Cabinet meeting last week there are 2.8 million people out of work due to ill-health and one in eight young people not in education, training or employment.
Last year, the Government spent £65billion on sickness benefits – a 25% increase since the year before the pandemic. It is forecast to hit £100billion before the next general election. Reforms are expected to be set out in a welfare green paper but ministers are bracing for a massive backlash.
Research published just last week by Trussell found more than three quarters of people claiming Universal Credit and disability benefits had gone without essentials in the last six months. Four in ten had also skipped meals to keep up with other essential costs. Here The Mirror looks at what could change and where the cuts could fall.
Personal Independence Payment (PIP) cuts
Ministers are reportedly planning to cut up to £5billion from the welfare bill through changes to Personal Independence Payment (PIP) benefits. The fund – for people both in and out of work – gives people help with extra living and mobility costs linked to their disability.
A leak of the plans suggests ministers are planning to make it harder for people to qualify for the payments which charities have already warned would be “catastrophic”. There are also suggestions payments could be frozen next year so it does not increase in line with inflation.
The scale of what is being proposed here is huge. The Resolution Foundation estimates that to reduce PIP costs by £4billion in 2029/30, it would require at least 630,000 fewer people receiving the benefit – or a 15% real-terms cut to the value of the award over the same time period.
But it is understood ministers have ruled out replacing the benefit with vouchers as first proposed by the Tories under ex-PM Rishi Sunak.
Universal Credit changes
The government is also said to be looking at hiking the basic rate of Universal Credit paid to people already in work – or looking for employment. This currently stands at just over £311 per month for a single person over 25.
And Work and Pensions Secretary Liz Kendall also wants to plough some of the money – around a billion pounds – into employment support for those looking for a job.
Last month she said “depsite all the myths a lot of people who are currently on sickness or disability benefits want to work”. But there are also reports the benefit rate paid for those deemed unfit to work due their disability or ill-health could also be cut.
Work Capability Assessments reforms
Ministers have previously vowed to reconsult on changes to a key disability used to determine whether someone with a health condition or disability is fit to work.
It follows a High Court ruling in January that said a Tory-era consultation on reforms to the Work Capability Assessment were unlawful. In the autumn of 2023 the Department for Work and Pensions (DWP) announced plans to change the way the WCA was scored. One of the options being looked at included removing or reducing scores for problems with mobility.
Despite the court’s ruling, Labour said the Government “intends to deliver the full level of savings in the public finances forecasts.” The level of any savings may be set out by the Office for Budget Responsibility at the Spring Statement in a fortnight.
What happens next?
Many of the cuts will be set out officially for the first time when the Chancellor Rachel Reeves delivers the Spring Statement on 26 March. This will come alongside forecasts from the Office for Budget Responsibility setting out any proposed savings from the reforms.
But expect the Work and Pensions Secretary Liz Kendall to speak about the overall changes to welfare in the coming days and she prepares to lay the ground. Labour MPs are growing increasingly anxious over the scale of the cuts after one prominent charity – Scope – said “ripping PIP away will be catastrophic for disabled people”.
And on Monday, 16 major charities – including Trusell, Scope, and Mind – warned the government benefit cuts will have a “catastrophic impact on disabled people up and down the country”. In a letter to the Chancellor they estimated around 700,000 more disabled households could be pushed into poverty.
Any of the changes announced are also expected to be subject to a consultation period – meaning they won’t be introduced imminently.
What have Labour MPs been saying?
Some Labour MPs have already begun publicly raising concerns over the reported proposals. Speaking to the BBC’s Westminster Hour on Sunday, Rachael Maskell, the MP for York Central, said that she has had a “flurry of emails” from people who are “deeply concerned” about the prospect of changes to the system.
She said: “We recognise the economic circumstances that we’re in and the hand that we were given and of course it is right that the Chancellor has oversight over all those budgets but not at the expense of pushing disabled people into poverty.” In comments that will cause concern in No10, Ms Maskell also said she had picked up “deep, deep concern” among colleagues and called for a “compassionate system and not taking just draconian cuts”.
Expect more Labour MPs to speak out in the coming days.