What welfare cuts could Labour announce today? From PIP to Universal Credit

Estimates of Labour cuts continue to rise as MPs grapple with ministers

More details on the rumoured billions in welfare cuts Labour plans to announce this week have been revealed as reports indicate ministers are looking to shave £6 billion from disability benefits claimed by millions of people.

Reforms to the Personal Independence Payment (PIP) are now widely expected, with Labour MPs understood to be divided on the cost-cutting policy package. The payment is designed to help people with extra costs incurred by their disability, whether they are working or not.

The changes will include making it harder to qualify for PIP, as around £5 billion of the floated £6 billion in cuts focuses on the disability benefit claimed by 3.6 million people.

Ministers had also reportedly been looking at freezing PIP payments to prevent the payment levels from rising with inflation, as all benefits do, in 2026. However, it is understood that pressure from backbench MPs over the plans has led to this idea being taken off the table.

Reforms to the Personal Independence Payment (PIP) are now widely expected (PA Wire)

Meanwhile, Whitehall insiders have indicated that there could be a freeze or reduction to the health-related element of Universal Credit, which is a separate benefit, for those with long-term sickness. This could be accompanied by a boost to the incomes of Universal Credit claimants seeking work.

A report from the influential right-wing Policy Exchange think tank gives yet another idea of what could be expected, as a former senior special adviser to the prime minister penned his recommendations to make ‘major reforms’ to PIP.

Jean-Andre Prager began his career as a policy advisor for the Conservatives and became a special advisor to the prime minister in 2018. This means he advised Theresa May and Boris Johnson before being promoted to senior adviser under Rishi Sunak.

His report recommends “major reform” to PIP, making it a “conditional” benefit for those aged 16 to 30. This means those in this age bracket would be required to look for work or be involved in further education or training, except in exceptional circumstances.

However, several experts have taken issue with changes to PIP being made with the aim of boosting employment, pointing out that it is not an out-of-work benefit. This means the rumoured £6 billion in savings would appear not to wash with Labour’s state goal of boosting employment, critics say.

Analysis by the Joseph Rowntree Foundation also points out that, if the full amount in cuts were to go ahead, it would be the biggest cut to disability benefits since the Office for Budget Responsibility (OBR) was created in 2010.

Peter Matejic, chief analyst at the Joseph Rowntree Foundation, added: “If the government cuts benefits, this will only serve to deepen hardship. As we've demonstrated, cuts on this scale would be unprecedented. It is no answer to the nation’s health or employment prospects.

“If a disabled person needs financial support to be able to live and work, taking that support away or freezing it risks pushing them further away from a job. It is an unethical and short-sighted approach.”

Ministers are said to be considering a ‘right to try’ policy which would see disabled benefit claimants able to retain their benefits should they undertake employment that does not become long-term (PA Archive)

James Taylor, Executive Director of strategy at disability equality charity Scope said: "Ripping PIP away will be catastrophic for disabled people.

"PIP exists because life costs more if you are disabled. Those costs won’t disappear if the government squeezes eligibility. Many disabled people use PIP to get to and from work and to pay for essential equipment like mobility aids.

"Making it harder to get benefits will just push even more disabled people into poverty, not into jobs. The Chancellor has a choice – cut benefits and increase poverty, or invest in an equal future for disabled people. Making the wrong choice will have a devastating impact on disabled people and their families." 

Ahead of the government’s announcement, several PIP claimants and advisors shared their experience of the benefit with The Independent. One told the paper that the application process is already “complex, stressful and degrading”, with difficult assessments making it hard for people to get the support they are entitled to.

The Department for Work and Pensions (DWP) has not yet given any confirmed details of the upcoming changes to benefits, with an announcement expected before Rachel Reeves’ Spring Statement on 26 March.

Last month, work and pensions secretary Liz Kendall said too many people claiming benefits instead of working were “taking the mickey.”

While a DWP-commissioned report found that around half of those on health and disability benefits thought they would never be able to work, Ms Kendall said: “I don’t blame people for thinking that they can’t, because they’re stuck on a waiting list for treatment, they haven't had the proper support that they might need from the job centre.”

Ahead of the much-anticipated Green Paper, the DWP announced 1,000 work coaches are set to be deployed to jobcentres across the UK to help sick and disabled people find employment.

It has also been reported that ministers are considering a ‘right to try’ policy which would see disabled benefit claimants able to retain their benefits should they undertake employment that does not become long-term.