Sir Keir Starmer’s Government is poised to confirm cuts to welfare on Tuesday amid mounting backbench disquiet about the potential extent of the reforms. Work and Pensions Secretary Liz Kendall is expected to outline plans to get more people back to work and cut the cost of the rising benefits bill.
Downing Street has said there is a “moral and an economic case” for an overhaul and that the changes would put the welfare system “back on a more sustainable path”. There have been reports that the changes could slash some £5 billion of welfare payments.
But there has been mounting unease on the Labour Party’s backbenches ahead of the anticipated changes, including over potential changes to the personal independence payment (PIP), the main disability benefit. York Central MP Rachael Maskell has said she would be concerned if the Government changed the eligibility criteria to claim PIP.
Labour Greater Manchester mayor Andy Burnham warned that changes to eligibility and support while leaving the system as it is would “trap too many people in poverty”.
Reports suggest the scale of the backlash has prompted a rethink of rumoured plans to freeze the level of PIP rather than increase it in line with inflation, delivering a real-terms cut to 3.6 million claimants. Ms Kendall sought to reassure MPs on Monday 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 2.8 million to about 4.0 million since 2019. The benefits bill has risen with this increase, reaching £48 billion in 2023-24, and is forecast to continue rising to £67 billion in 2029-30.
That would exceed the current schools budget. Number 10 has denied that the plans are purely as a result of the UK’s difficult fiscal situation.
Chancellor Rachel Reeves is set to deliver a spring statement on March 26 against the background of a faltering economy and drastically reduced headroom against the debt rules she set herself in October. “I think the Prime Minister has been clear there is both a moral and an economic case for fixing our broken social security system that’s holding our people back, and our country back,” the Prime Minister’s official spokesman told reporters.
“That is why tomorrow the Government will set out plans to overhaul the health and disability benefits system so it supports those who can work to do so, while protecting those who are most in need, and put the welfare system back on a more sustainable path.”