The government is facing intense scrutiny and potential rebellion from some Labour MPs as it moves forward with plans to cut £3 billion from working-age health and disability benefits over the next three years. The proposed cuts come at a time when the bill for these benefits is projected to reach £70 billion by 2030. Rachel Reeves, the Shadow Chancellor, has indicated that the government may go further than former Tory Chancellor George Osborne, who had previously cut working-age benefits for four years but allowed the personal independence payments (Pip) to continue rising.
The government plans to freeze the Pip, a benefit not linked to work, which would necessitate a vote on primary legislation. The Social Security Administration Act 1992 currently protects certain benefits, stating they should rise in line with inflation each year. However, the bulk of nearly £6 billion in cuts is expected to come from the Pip alone. This planned freeze has sparked concern among some Labour MPs, with one stating their discontent:
“We’re in government and I feel utterly useless. They [No 10] will understand our frustrations, though largely private, when we get a chance to vote.” – A Labour MP
The disability benefits bill saw an increase of nearly £13 billion, rising to £48 billion between 2019-20 and 2023-24. In addition to freezing benefits, the government plans to tighten eligibility criteria for key disability benefits. Despite facing opposition, the government's large parliamentary majority makes it unlikely that these changes will be blocked.
The government also plans to invest £1 billion into back-to-work programs aimed at supporting the long-term sick. These initiatives will range from "supportive phone calls" to more intensive work placements and courses. The intent behind these programs is twofold: to reduce the welfare bill and to assist individuals capable of working in re-entering the workforce.
“But we inherited a system which is broken, it is indefensible, economically and morally, and we must and we will reform it. We will have clear principles, we will protect those who need protecting. We will also support those who can work back to work, but Labour is the party of work, we’re also the party of equality and fairness.” – Keir Starmer
The government's rationale for these cuts is to address what it describes as an unsustainable welfare system. A government source highlighted the need for reform:
“While the next election won’t be won or lost on welfare, we do need to show progress on limiting the rising bill,” – A government source
In light of these developments, some Labour MPs are threatening to vote against freezing disability benefits. The government hopes that its plans to reform employment schemes will alleviate concerns and garner support from worried MPs.
The looming freeze on disability benefits has provoked a broader debate on the balance between financial sustainability and social responsibility. As the government prepares to introduce primary legislation for these changes, all eyes are on Parliament to see how this contentious issue will unfold.