Keir Starmer's administration is reportedly gearing up to announce significant reductions in Britain's welfare expenditure in the upcoming weeks.
The anticipated cuts to benefits, set to be revealed before the Spring Statement, could spark the largest backlash of Starmer's time in office. Some Labour MPs have already cautioned the Prime Minister against imposing "draconian" reductions, while disability organisations are sounding the alarm about potential "catastrophic" consequences.
Work and Pensions Secretary Liz Kendall has been working on proposals aimed at decreasing the number of individuals receiving health-related benefits and facilitating their return to employment. In a recent Cabinet meeting, she highlighted that there are 2.8 million people currently unemployed due to health issues, with one in eight young individuals neither in education, training, nor employment.
Government expenditure on sickness benefits surged by 25% last year compared to the pre-pandemic period, reaching £65 billion. Projections suggest this figure could escalate to £100 billion before the next general election.
Although the proposed reforms are expected to be outlined in an upcoming welfare green paper, ministers are preparing for substantial opposition, reports the Mirror.
Recent research from Trussell Trust revealed that over three-quarters of those on Universal Credit and disability benefits had forgone basic necessities in the past six months. Additionally, 40% had missed meals to manage other essential expenses.
Personal Independence Payment (PIP) cuts
Ministers are rumoured to be eyeing a £5billion slash in welfare spending through changes to Personal Independence Payment (PIP) benefits. This fund, critical for individuals both employed and unemployed, offers essential assistance with the added living and mobility expenses brought on by their disabilities.
Details leaked of these proposals suggest an aim to tighten eligibility criteria for PIP, which charities have warned could result in "catastrophic" outcomes. Additionally, there's talk that payments might remain static next year, failing to rise with inflation.
The extent of the potential cuts is considerable. The Resolution Foundation has calculated that a reduction in PIP expenditure by £4billion by 2029/30 would necessitate cutting around 630,000 currently supported individuals or imposing a 15% real-terms reduction in award value over this period.
It's been indicated, however, that suggestions of substituting benefits for vouchers, an idea previously floated while Rishi Sunak was PM, have been dismissed by ministers.
Universal Credit changes
Turning to Universal Credit, changes may also be in the pipeline here. Speculation points to a boost in the basic rate received by individuals already in work or seeking employment – the current figure stands at just above £311 per month for singles aged over 25.
Work and Pensions Secretary Liz Kendall has shown an interest in rerouting approximately one billion pounds towards bolstering employment support services for jobseekers.
Last month, she stated: "Despite all the myths, a lot of people who are currently on sickness or disability benefits want to work."
However, there are rumours that the benefit rate for those deemed unfit to work due to their disability or ill-health could also face cuts.
Reforms to Work Capability Assessments
Previously, ministers pledged to revisit changes to a crucial disability assessment used to determine if someone with a health condition or disability is fit for work. This follows a High Court ruling in January which declared a Tory-era consultation on reforms to the Work Capability Assessment as unlawful.
In autumn 2023, the Department for Work and Pensions (DWP) unveiled plans to alter how the WCA was scored. One option under consideration included reducing or eliminating scores for mobility issues.
Despite the court's decision, Labour claimed the Government "intends to deliver the full level of savings in the public finances forecasts."
The extent of any savings may be outlined by the Office for Budget Responsibility at the Spring Statement in two weeks' time.
What's next?
The specifics of many of the cuts will be officially announced for the first time when Chancellor Rachel Reeves delivers the Spring Statement on 26 March. This will coincide with forecasts from the Office for Budget Responsibility outlining any proposed savings from the reforms.
Work and Pensions Secretary Liz Kendall is set to discuss the sweeping reforms to welfare soon as she prepares to lay the groundwork. Labour MPs are feeling the pressure over the extent of the proposed cuts, especially after Scope, a leading charity, warned that "ripping PIP away will be catastrophic for disabled people".
Moreover, on Monday, 16 major charities, including Trussell Trust, Scope, and Mind, cautioned the government that benefit cuts could have a "catastrophic impact on disabled people up and down the country". They penned a letter to the Chancellor, estimating that approximately 700,000 additional disabled households might fall into poverty due to these changes.
It's also anticipated that any announced changes will undergo a consultation period, which means they won't take effect immediately.
What's the word amongst Labour MPs?
A number of Labour MPs have started voicing their concerns about the potential policy changes. Rachael Maskell, MP for York Central, shared with BBC's Westminster Hour on Sunday that she has received a "flurry of emails" from constituents who are "deeply concerned" about the possibility of alterations to the benefits system.
She commented: "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."
Ms Maskell's words are likely to raise eyebrows in Downing Street as she voiced "deep, deep concern" among her peers. She urged for a "compassionate system and not taking just draconian cuts".
It appears more Labour MPs will voice their opinions on this matter in the near future.
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