The Resolution Foundation thinktank has revealed that between 800,000 and 1.2 million people relying on personal independence payments risk losing annual support ranging from £4,200 to £6,300 by the fiscal year 2029-30. This revelation follows Labour's proposed reforms aimed at reducing disability benefit spending by £5 billion annually by the end of the decade, a move confirmed by Labour’s Liz Kendall. These reforms have faced criticism for potentially undermining Labour's commitments to reducing child poverty and food bank dependency, as highlighted by the Child Poverty Action group and Foodbanks.
The proposed reduction in disability benefit spending presents a significant shift from Labour's long-standing opposition to such cuts over the past 14 years. Existing claimants are expected to receive partial protection from these reductions. However, new claimants are set to experience a £47-a-week cut in the incapacity element of universal credit starting in 2026. Additionally, individuals under the age of 22 will be barred from claiming incapacity benefits.
While the £3-a-week rise in the standard rate of universal credit has been broadly welcomed, it contrasts starkly with the pandemic-era uplift of £20 a week, highlighting the challenges faced by those reliant on general benefits. The surge in disability claims in recent years stems from individuals unable to subsist on these limited general benefits, further complicating the landscape.
Critics have drawn comparisons between Labour’s current proposals and the austerity measures previously attempted by former Tory chancellor George Osborne. Scope, a prominent disability charity, has labeled these reforms as "the biggest cuts to disability benefit on record," underscoring their severity.
"The irony is that the main beneficiaries [of the plans] are those without health problems or a disability," remarked Louise Murphy from the Resolution Foundation.
Despite widespread criticism, Kendall maintains that the £5 billion reduction is necessary, albeit modest in her view. The challenge for Labour lies in balancing its pledge to deliver social justice and tackle poverty while adhering to self-imposed fiscal restraints. This balancing act is crucial as the party seeks to implement its economic strategy without alienating a significant portion of its base.