The government is understood to want to avoid a repeat of the controversy following the cuts to the Winter Fuel Payment which saw months of hostile headlines and commentary from upset Labour MPs.
Anxious Labour MPs were brought in to Downing Street in batches to speak to Starmer’s Political Director Claire Reynolds alongside special advisors who are expert in welfare policy, with No 10 in “listening” mode.
Another said: “They can’t just introduce cuts to PIP (Personal Independence Payments) and not expect a backlash. They’re going to have to back down”
Chancellor Rachel Reeves is expected to announce cuts to the welfare budget during her spring statement on March 26th as she seeks to plug an estimated £11.5bn hole in her finances and meet her fiscal rules.
Her plans are thought to include cutting sickness and disability benefits in order to persuade people back to work – with benefits increasing for those who are fit to work, and decreasing for those deemed unfit.
But the plans are the subject of a backlash from Labour MPs. The i Paper understands at the meetings backbenchers were pushing for mitigations for the most vulnerable disabled people as the Government mulls reforms to the Personal Independence Payment (PIP)
The Office for Budget Responsibility forecast at the time of October’s budget that spending on health and disability benefits would rise from £64.7bn in 203-24 to an estimated £100.7bn by 2030.
No details will be made available to backbenchers before the Cabinet is made aware of the government’s final plans, a senior source said.
The changes will include making it harder to qualify by changing the criteria assessors used to determine if an applicant is eligible for the benefit.
Work and Pensions Secretary Liz Kendall had been due to set out plans this week, but insiders were taken aback by the strength of feeling on the Labour benches and have sought to better explain the Government’s thinking.
‘We’re called the Labour Party, for goodness sake’
The row spilled into Prime Minister’s Questions in the House of Commons on Wednesday.
Asked by Labour’s John Slinger how he would fix “a broken welfare system” while protecting the most vulnerable, Starmer replied: “We inherited a system which was broken, which 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 are also the party of equality and fairness.”
Accusing the Tories of leaving behind a “lost generation” with one in eight young people not in education, employment or training, Starmer went on to reject calls from MP Richard Burgon, a key figure on the party’s left, for a wealth tax.
There is some exasperation at the calls, with one government insider arguing there is a moral case for getting people into work. “We’re called the Labour Party for goodness’ sake,” they told The i Paper.
The Government is also understood to be preparing to announce plans to freeze PIP which currently rises each year with inflation.
The i Paper understands No 10 is now working to address backbench concerns by the deadline of next week, with meetings in Downing Street likely to carry on into Thursday. Kendall is also in discussions with Labour MPs about the changes.
Meanwhile, 16 major charities – including the Trussell Trust, Scope, and Mind – wrote to the Government warning that benefit cuts would have a “catastrophic impact on disabled people up and down the country” and claimed that as many as 700,000 more disabled households could be pushed into poverty because of the plans.
“Sickness benefits are forecast to cost £100bn by 2030. We can’t afford that – nor is it right for so many people to be relying on the state. The country needs everyone who can work, to work.
“But instead of tackling this problem, Labour are talking about freezing benefits for disabled people instead. That is no substitute for proper welfare reform and does nothing to get people off benefits into work.”
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