Keir Starmer will convene his Cabinet on Tuesday where they are expected to sign-off a package of reforms to sickness and disability benefits. DWP Secretary Liz Kendall will then announce the changes
Keir Starmer’s government is expected to set out controversial plans to slash billions from welfare in less than 24 hours.
The PM’s will convene his Cabinet on Tuesday morning where they are expected to sign-off a package of reforms to sickness and disability benefits. Work and Pensions Secretary Liz Kendall will then address the Commons – setting out the proposals in a long-awaited government green paper.
Despite major unrest among Labour MPs over a leak of the proposals, the government is ploughing ahead with plans to slash billions from the welfare bill. Chancellor Rachel Reeves will later reveal the full scale of welfare cuts – believed to be over £5billion – in the Spring Statement on March 26.
Why are ministers reforming the system?
Ministers are under pressure to tackle the growing welfare bill. Working-age adults accounted for over £48billion on health and disability benefits in 2023/24, according to the OBR. By 2029/30 this is forecast to rise to over £75billion.
Last week Keir Starmer said the current welfare system was “indefensible”. He told MPs at PMQs : “We must and we will reform it… we will protect those who need protecting. We will also support those who can work back to work. Labour is the party of work. We are also the party of equality and fairness.”
Liz Kendall, the Work and Pensions Secretary, also says she wants to get more people in work and is concerned especially about the growing number of young people not in employment, education or training. She has promised to ensure “trust and fairness in the social security system”, saying on Monday: “I want to say there has understandably been lots of speculation about the government’s reforms to social security.
“I want to assure the House, and most importantly the public, that we’ll be coming forward with our proposals imminently, to ensure there is trust and fairness in the social security system, and to ensure it’s there for people who need it now, and for years to come,” she added.
What reforms are expected?
But leaked proposals of the reforms are hugely controversial.
It is suggested the bulk of cuts (£5billion) will hit a key disability benefit – Personal Independence Payments (PIP) – with eligibility tightened for the payments. The fund – for people both in and out of work – gives people help with extra living and mobility costs linked to their disability. Charities have already warned this would be “catastrophic” for people impacted.
Ministers have also promised to stick with Tory-era plans to slash spending on sickness benefits by around £3billion by 2030. And Ms Kendall also wants to plough some of the money saved – around a billion pounds – into employment support for those looking for a job.
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There is also expected to be legislation to introduce a “right to try guarantee” to stop people receiving health-related benefits from having their entitlements automatically re-assessed if they enter employment. The government is 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.
Has there been a U-turn?
As part of the leaks of planned reforms there were suggestions PIP payments could be frozen next year so it does not rise in line with inflation. But it is understood this proposal may have been dropped amid a massive backlash and warnings even austerity-era Chancellor George Osborne didn’t freeze PIP.
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Dropping such plans will also avoid an immediate Commons vote on the issue of disability reforms and a a potentially damaging rebellion in the chamber. Other changes planned in the green paper are not as immediate, and will have to be consulted on before ministers press ahead.
What have Labour MPs and critics said?
Charities have reacted with outrage, warning tens of thousands of disabled pensioners could be pushed into poverty due to the changes. Labour MPs, unions, and senior figures in the party have also been criticising the plans – both publicly and privately – in recent days.
Andy Burnham, the Mayor of Greater Manchester, suggested the proposals risked trapping “too many people in poverty”. He warned: “I would share concerns about changing support and eligibility to benefits while leaving the top-down system broadly in place. It would trap too many people in poverty. And to be clear: there is no case in any scenario for cutting the support available to disabled people who are unable to work.”
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Labour veteran Diane Abbott also said voters will turn their back on Labour if it announces swingeing welfare cuts on top of winter fuel changes. Ms Abbott said: “I think being on welfare is very depressing. It’s very humiliating. It sort of brings you down, but I have no sympathy with the idea that the way to get people out of welfare is to cut the money they have to live on.”
She also said the government should introduce a wealth tax on the super-wealthy with assets over £10million to plug gaps in the public finances. Ms Abbott is among MPs – from across the party – to have expressed concerns in recent days.
Speaking in the Commons on Monday Labour MP Steve Witherden warned ministers tens of thousands of disabled people could be pushed into poverty. He said: “I am concerned that the rumoured cuts will not help people into work, but will instead drive people into further destitution.” As MPs pour over the details of the plans in the coming days, don’t be surprised if the number of critics swells.
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