Analysis published on Monday afternoon shows that 50,000 children will be pulled out of poverty after the Government was forced to tear up its controversial welfare legislation
Around 50,000 children will be lifted out of poverty after the Government shredded its controversial welfare plans, new analysis shows.
Number-crunchers now estimate that an increase to some Universal Credit components will pull tens of thousands of youngsters out of relative poverty. It comes after the Government was forced to shelve a shake-up of personal independents payments (PIP) for the disabled following a huge rebellion by Labour MPs.
Ministers were hoping to slash £5billion a year from the welfare bill by limiting access to PIP and health elements of Universal Credit. But more than 100 backbenchers, including a number of Labour heavyweights, found this unpalatable and signed an amendment that would torpedo the plans.
This forced the Government into an embarrassing climbdown ahead of a crunch vote last Tuesday. There will now be no changes to PIP until a review is carried out by DWP minister Sir Stephen Timms, it was announced.
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As a result no money will be saved, the DWP says. MPs will vote on the hollowed-out Universal Credit Bill on Wednesday, with Keir Starmer confident the U-turn will satisfy critics within his own party.
According to the Government’s own analysis, 250,000 people – including 50,000 children – were set to be pushed into poverty if the original plans had gone ahead. The Government was forced to make concessions after 108 Labour MPs publicly rebelled.
York Central MP Rachael Maskell branded the plans “Dickensian” as she called on her backbench colleagues to vote it down in what would have been a devastating defeat for Mr Starmer.
As a result welfare changes are now expected to alieviate poverty rather than cause it. But new analysis published by the Department for Work and Pensions (DWP) states: “It is estimated that there will be 50,000 fewer individuals in relative poverty after housing costs in the financial year ending 2030 as a result of the modelled changes to social security, compared to baseline projections.”
Updated legislation now making its way through Parliament will increase the Limited Capability for Work Related Activity (LCWRA) component in UC. The new legislation also includes plans to raise the standard rate of UC.
The lack of savings means Chancellor Rachel Reeves is likely to announce tax rises in her Budget in the autumn.
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