Ministers are bracing for a ferocious Labour backlash today as they finally unveil billions of pounds of benefits cuts.
Work and Pensions Secretary Liz Kendall is set to lay out moves to save around £5billion amid fears spiralling costs are ‘unsustainable’.
Disability and incapacity benefits are expected to be the focus, with eligibility tightened and ongoing checks ramped up. Those with mental health complaints could also face more obligations to seek jobs, while disabled people will be incentivised to try work with guarantees they will not lose out if it proves impossible.
However, Keir Starmer is facing stubborn Labour resistance to the proposals even before they are formally announced, with critics branding them ‘shameful’.
The idea of freezing Personal Independence Payments (PIP) in cash terms already appears to have been ditched in the face of a mutiny on the Left.
Work and Pensions Secretary Liz Kendall is set to lay out moves to save around £5billion amid fears spiralling costs are ‘unsustainable’
The benefits bill has been rising and is forecast to continue going up
While the government has been making the ‘moral’ case for the overhaul, it could be critical for Rachel Reeves as she struggles to balance the books at the Spring Statement next week.
The Chancellor is thought to have a £15billion black hole to fill in the finances after economic growth slumped and debt interest costs spiked. She has ruled out more borrowing and significant tax rises, leaving spending cuts her only option.
Cabinet is due to sign of the long-awaited welfare package this morning before Ms Kendall makes a statement to the House of Commons at lunchtime.
The biggest ticket item is expected to be limiting entitlements to PIP – which is not related to work status, but paid to support people with extra living costs from their disability.
There are reports that people will need to show they have serious difficulty with everyday tasks such as washing, dressing and eating.
That could make it much harder for those with mental health issues to claim.
However, those with serious degenerative disabilities could be exempted from needing reassessments altogether.
Meanwhile, the work capability assessment for the incapacity element of Universal Credit could be replaced with a tougher system. The highest rates of those handouts could be reduced in real terms.
Many MPs believe around £1billion of the savings will be recycled into helping claimants get into work.
And there will be action to remove the perverse incentive against those on incapacity benefits trying work. Currently if a job proves impossible and has to be abandoned, people can go back to lower payments.
The Tories pledged to slash £12billion off the benefits bill before the election, although the figures they presented were hotly disputed.
Touring broadcast studios this morning, Cabinet Office minister Pat McFadden argued that the UK was the only major economy where inactivity had not fallen back to pre-Covid levels.
He confirmed reassessment reforms would be among the changes, and insisted that the Cabinet is ‘united’ around the need to trim costs.
Asked whether support for people with mental health conditions should be ‘time-limited’, Mr McFadden told Times Radio: ‘We do think it requires support, but we don’t think it renders people permanently… reassessments will be part of the package announced today.
‘We want people, if they’re on long-term sickness benefits, not to languish there forever, but to be reassessed.
‘There have been too few reassessments in recent years.’
Labour Greater Manchester mayor Andy Burnham warned yesterday that changes to eligibility and support while leaving the system as it is would ‘trap too many people in poverty’.
Speaking on BBC Newsnight, former frontbencher Baroness Chakrabarti suggested what she had been hearing about the contents of the green paper was ‘wrong in principle’.
She also laid into briefings about the proposals, insisting: ‘Shame on those people playing politics, those spin doctors and special advisors who’ve been playing this game at the expense of people’s mental health.’
Keir Starmer is facing stubborn Labour resistance to the proposals even before they are formally announced, with critics branding them ‘shameful’
The Chancellor yesterday dismissed the idea of borrowing more to keep benefits the same as ‘not serious’
Ms Kendall has sought to reassure MPs that the reforms would ensure ‘trust and fairness’ in the social security system and make sure benefits are available ‘for people who need it now, and for years to come’.
Ministers insist that reform is necessary, given the number of people in England and Wales claiming either sickness or disability benefit has soared from 2.8million to about 4million since 2019.
The Chancellor yesterday dismissed the idea of borrowing more to keep benefits the same as ‘not serious’.
‘Every day an additional 1,000 people are going on to Personal Independence Payments, disability benefits. That is not sustainable,’ she said.
