Keir Starmer will unveil drastic cuts to disability benefits on Tuesday, despite deep opposition from Labour MPs and poverty campaigners, and warnings from economists against making kneejerk savings to hit fiscal targets.
In the government’s most controversial move yet, it will announce a package of changes expected to affect some of the UK’s most severely disabled people.
The measures could deny benefits for people who need some help washing themselves, preparing food or remembering to go to the toilet, as ministers attempt to overhaul the welfare system and balance the books.
However, Downing Street has denied the plans to cut between £5bn and £6bn from the welfare bill were purely the result of the UK’s difficult fiscal situation, arguing there is a “moral and economic case” for reforming benefits.
The prime minister’s official spokesperson said there was a clear case “for fixing our broken social security system that’s holding our people back, and our country back”.
“We’ve got a duty to fix the system, to ensure that safety net is always there for the most vulnerable and severely disabled, but also [that it] supports [people] back into work, rather than leaving people written off,” the spokesperson said.
The work and pensions secretary, Liz Kendall, was expected to announce that as part of the package, her department would spend up to £1bn a year extra on helping people back into jobs.
As debate over the welfare changes continued to rage, the former Bank of England deputy governor Charlie Bean warned the chancellor against making kneejerk cuts to try to hit fiscal targets that are five years away.
The welfare plans are expected to form part of a package of cuts the chancellor, Rachel Reeves, will announce in next week’s spring statement, in response to weaker forecasts from the independent Office for Budget Responsibility (OBR).
But Bean – who is also a former member of the OBR’s committee, which agrees the forecasts – told the chancellor: “We’ve got ourselves into a, frankly, pretty ridiculous position, where we’re doing fiscal fine-tuning to control the OBR forecast five years ahead.
“The OBR forecast embodies all sorts of adjustments, judgments – it’s pretty flaky. People who do the forecasts understand the uncertainty.”
He told an event of the Resolution Foundation thinktank: “I think we want to get away from this idea that we continually have to be neurotically changing taxes and spending to try to control this OBR forecast so that it’s hitting our target.”
Bean also warned that approaching welfare reform with a savings target was the wrong way around, and the government should instead be thinking about how to help those on disability benefits who were able to work back into employment.
Reeves defended her approach on Monday. “When we’re spending £100bn a year on servicing government debt, I don’t think anyone could seriously argue that we don’t need to get a grip on government borrowing and government debt,” she said in an interview with Bloomberg TV. “It is important that there is headroom against the shocks we face.”
While ministers have acknowledged deep anxiety among welfare recipients, the disability minister, Stephen Timms, refused to guarantee, when pressed by MPs, that the most disabled in society, who would never be able to work, would not see their support cut.
The Labour veteran Diane Abbott said cutting benefits for disabled people was “not a Labour thing to do”, warning that, over time, many voters would look at policies such as cuts to benefits “and think: is this my Labour party?”
Andy Burnham, the Labour mayor of Greater Manchester, has also warned against tightening the eligibility criteria for benefit payments or reducing the amounts, saying this would “trap too many people in poverty”.
A number of experts have also privately raised alarm at figures the government has been using to justify the cuts. Government sources have routinely briefed that the growing benefits bill must be tackled because of the rise in numbers of people signed off sick with mental illness.
But new analysis from the Joseph Rowntree Foundation (JRF) found those on the highest benefit for disabled people signed off from work had a physical disability in the vast majority of cases.
The anti-poverty charity’s data, obtained from the Department for Work and Pensions under freedom of information, found that five in every six people receiving the benefit with a mental health condition had at least one physical condition as well.
The JRF found that 90% of the forecast spending growth on personal independence payments (Pip) between now and 2030 will be for those who get both components – meaning they are people with significant difficulties with mobility and conducting daily tasks such as washing and cooking.
The charity said its research found that 70% of those families with someone with a disability were already going without essentials such as food, heating and hot showers. The figure was particularly high for those with a learning disability or mental health condition.
There was also considerable concern from campaigners about some of the ways the statistics had been portrayed in order to justify the forthcoming cut, in particular a government press release that claimed the number of people “considered too sick to work” had “quadrupled” since the pandemic, referring to a 383% rise.
The rise was attributable to the move on to universal credit, according to the JRF’s senior policy adviser, Iain Porter, who said although there was concern it had risen, the real rise was more like 40%.
Peter Matejic, the JRF’s chief analyst, said: “This analysis shows there is no way to achieve the suggested £5bn cut without taking money from people who both need help with everyday tasks, such as preparing food or using the toilet, and help getting around.
“A government that came to office pledging to end the moral scar of food bank use clearly should not be taking steps that could leave disabled people at greater risk of needing to use one.”
