The howl from those who rely on disability-related personal independence payments (PIP) was almost palpable as Chancellor Rachel Reeves put her budgetary headroom front and centre of her economic strategy.
Reeves announced a package of savings to the welfare bill which will hit more than three million families. She had hoped the changes announced last week would generate about £5bn in savings per year by the end of the forecast period, but official forecaster the Office for Budget Responsibility (OBR) contradicted the Government’s overly optimistic assessments and refused to “score” many of the proposed changes, claiming that the Treasury had not provided sufficient detail about the policy proposals.
The OBR said the collection of measures on welfare will save just £3.4bn by 2029-30, after factoring in new spending on job support and the administration of the welfare system, although it stressed that its estimates were highly uncertain. What ensued was a scrabble to find £500m of cuts to the welfare budget. Slash first, ask questions later.
The administration hopes that scaling back a ballooning health and disabilities benefits bill will encourage more people into jobs and paying taxes rather than relying on state support. But ever since ministers began to put the “moral case” for cutting spending on UK benefits, emotions have been running high. The argument that Labour is “the party of work” and has a duty to reduce welfare costs has left some in the party furious, and others exasperated at that fury.
“The last-minute scramble to claw even more funds from the welfare budget has shattered any illusion of a moral case for cuts,” Labour MP Neil Duncan Jordan said. “The changes to disability benefits are being designed to meet the Chancellor’s self-imposed fiscal rules, but our welfare policies should be designed to meet people’s needs.”
The chancellor did her best to frame the narrative. “The world is changing,” she told the House of Commons, in reference to the global market turmoil caused by the chaos of US President Donald Trump. She argued that the anaemic growth forecasts were evidence of the need to double down on her plans and go further and faster in the pursuit of reform and growth by building more homes and accelerating spending on defence.
Anxiously listening to Reeves 75 miles away in Hampshire, was John Stainton. He’s been living with primary progressive multiple sclerosis (MS) for the last three years. A former Ministry of Defence civil servant for over 35 years, Stainton, 63, was awarded an OBE for his services in Afghanistan and now volunteers as a school governor. He needs to claim PIP to help him with tasks he can’t manage such as cleaning his flat, buying ready-chopped vegetables so he doesn’t cut himself with his shaking hands, incontinence pads and the occasional taxi if the bus doesn’t take him close enough to where he needs to go.
“Many of the people I know with MS need the PIP to help them stay in work. It just doesn’t make sense that the Government cuts this money; people will no longer be able to work, and more people will be claiming benefits. These are not wastrels; these are not ne’er-do-wells. These are people who want to make a difference,” he told The i Paper. “I had to go to appeal to get my PIP claim, and it caused an enormous amount of stress. It would be brilliant if there was a lifelong cure for MS but there isn’t. It’s progressive, and it’s getting worse. PIP is a lifeline.”
Back in Westminster, the mood on the Labour backbenches was grim and got even worse once the impact assessment on welfare was published shortly after Reeves finished her statement.
The evaluation showed a quarter of a million people, including 50,000 children, will be pushed into relative poverty. About 800,000 people will lose out on PIP, with individuals set to lose an average of £4,500 a year by 2029-30. The figures show about 370,000 people who are currently in receipt of disability benefits will no longer get them when they are reassessed, while close to half a million future claimants will no longer be entitled to them as well. Meanwhile, around 2.25m people currently in receipt of universal credit will be impacted by the freeze on rates, losing on average £500 a year.
The political responses came fast and furious. MPs pleaded with Reeves to reverse cuts to health and disability benefits, warning they will lead to increased poverty.
Labour MP Debbie Abrahams, who chairs the Work and Pensions Committee, asked Reeves, “How will making people sicker and poorer help in terms of driving our economy up and people into jobs?”
But Reeves stuck to the moral case for her changes.
“There is nothing progressive, there is nothing ‘Labour’ about not supporting people who are disabled and sick and young people to do jobs that are commensurate with what they are able to do.” She said one in eight young people had been “effectively written off” by the Conservatives in Government, and ministers were consulting on an additional premium for the sickest and most disabled, she added.
square IAN DUNT
Labour cannot bring itself to be honest
Read MoreLabour MP Rachael Maskell said she recognised the importance of fiscal responsibility before adding: “However, as a Labour Party we’ve got an additional responsibility around having social responsibility.”
Reeves replied, “I think everyone in the chamber shares the concern about the most sick and disabled who need support,” which is why the Government is “consulting on an additional premium payment for the most severely disabled.”
The calls for a wealth tax to avoid reductions are now coming thick and fast. Left-winger Richard Burgon dubbed the welfare changes a “cruel choice,” adding, a wealth tax would be “a braver option.”
Labour MP Imran Hussain said Reeves should “introduce a wealth tax so that multimillionaires and billionaires can pay their fair share”. Green Party co-leader Adrian Ramsay called for “a tax on the very wealthiest”.
John Stainton, listening to his radio in Hampshire, said he can see the case for increasing defence spending. He joked that perhaps a role can be found for him in Britain’s prospective defence force in Ukraine. But he’s still alarmed by what he heard on Wednesday.
“I know savings have got to be found, but to hit disabled, disadvantaged people the most doesn’t seem right,” he told The i Paper. “It’s all very well to spend more money on defence, but what sort of country is it we want to defend if we say to disabled people ‘you are on the scrapheap’?”
The frantic search for further welfare savings has undermined the carefully pitch-rolled moral case for the cuts. Like other disabled voters, Stainton will be waiting to see if Labour MPs dare to stand up to Reeves and rebel.
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