The Government’s pledge to cut £5bn from the benefits bill by making it harder for some disabled people to claim money, and excluding the young from incapacity benefits, is a major change to the welfare system.
The announcement is already worrying some Labour MPs, trade unions and disability campaigners – while delighting those who believe the welfare state has grown too large.
Ministers are clear that hundreds of thousands of claimants will see their income fall as a result of the measures, although others will see a small increase in their payments.
But there remain a large number of unanswered questions which must be resolved before it will be clear whether the Government is on track to meet its goals of cutting the benefits bill and helping more people back into work.
The “green paper”, a collection of proposed policies which will now be put out to formal public consultation, was published on Tuesday without an accompanying impact assessment.
The Government’s estimates of how many individuals will lose out from the changes, and how much money wil be cut per person, will not be made public until next week.
While independent bodies such as the Institute for Fiscal Studies have made their own analysis, the Department for Work and Pensions (DWP) will be viewed as more authoritative because it has access to the most comprehensive set of data on existing claimants.
How much money is really being saved?
A headline figure of £5bn of annual savings by 2030 has been trumpeted by the Government, but the details of this are not entirely clear.
It appears that the savings are relative to the counterfactual position where the welfare budget continues to grow at its current rate – rather than referring to an actual reduction in the overall money spent on benefits.
Only when the Office for Budget Responsibility (OBR) publishes its latest forecasts on the economy and public finances next Wednesday will the full context be revealed.
Those figures will also show whether these welfare savings remove the need for other cuts to public spending, or just fill a gap in the Treasury balance sheet that would otherwise have made the cuts even larger.
The DWP has confirmed that the changes to personal independence payment (PIP), which make it harder to claim money for certain lower-level disabilities, will be enshrined in new legislation and will therefore require a vote from the House of Commons and House of Lords.
That vote will take place some time this year, but it is not known whether that will be in the next few weeks or much further down the line. May has been touted as a possible.
Other parts of the reform package which are out for consultation may or may not require legislation, meaning it is not certain whether MPs will get a formal say on them.
How big will the backlash get?
Most of the Labour MPs who have spoken out against the welfare cuts are from the “Corbynista” left, or have a track record of campaigning on this issue.
Ministers have privately said they are pleased that middle-of-the-road backbenchers have so far held off from criticising the planned changes. In any case, the Government’s majority is so large that it is highly unlikely any rebellion would seriously threaten to stop the reforms from taking effect.
But many MPs appear to be reserving judgement until more details are known, such as the contents of the impact assessment, meaning that the backlash could grow – particularly if trade unions seek to exert pressure on Labour behind the scenes.
If the number of rebels threatens to exceed more than a couple of dozen, ministers may end up being pressured into watering down their plans even without a genuine risk of defeat.
Speaking on Wednesday morning, DWP minister Sir Stephen Timms refused to rule out coming back with further cuts or reforms in future.
With the UK economy flagging and the public finances balanced on a knife-edge, it is far from impossible that the Government will seek to make more savings from the welfare budget over the coming years.
Will it all work or not?
The OBR has a track record of predicting significant savings from benefits reforms which do not end up materialising. The number of claimants has mostly continued to climb, regardless of attempts from successive claimants to bring it under control.
In addition, some disability charities warn that reducing the amount of money available to individuals will not encourage them into work but the opposite, removing the safety net they use to build a brighter future for themselves.
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