Work And Pensions Secretary Says Benefits Cuts Will Save £5bn
5 min read
Secretary of State for Work and Pensions Liz Kendall has confirmed details of major reform to the welfare system, telling MPs that the changes will save £5bn by 2030.
Speaking in the House of Commons on Tuesday, Kendall said the changes mark "a shift towards prevention and early intervention" and to do "more to help people stay in work" and "get back to work more quickly".
The Labour government argues that the amount of money paid out in benefits is unsustainable and that more can be done to get people into employment.
Kendall announced that Universal Credit support will increase at a rate above inflation for people looking for work.
There will also be a 'right to try' rule, meaning that people will be able to attempt to rejoin the workforce without losing welfare support.
She also said that the Work Capability Assessment, which is used to determine whether people are fit to work, will be scrapped because people using it find it "stressful".
However, Kendall confirming that it would become harder for disabled people to secure personal independent payments triggered concern among some Labour MPs in the House of Commons.
While the government has not decided to freeze PIP support, a move which had reportedly been considered, the reforms triggered warnings from Kendall's own side about the impact on disabled people.
Debbie Abrahams, who chairs the work and pensions committee, warned that the changes amounted to the biggest social security cut in nearly a decade and told ministers not to "balance the books on the backs of the sick and disabled".
Clive Lewis, Labour MP for Norwich South also questioned whether the government understood "the pain and difficulty that this will cause millions of our constituents".
He added: "This £5bn pound cut is going to impact them more than I think her department was giving credit for...
"I would like her department to be able to look my constituents in the eye when I go back to them to tell them that this is going to work for them, because as things stand, my constituents, my friends, my family, are very angry about this, and they do not think this is a kind of action that a Labour government takes."
But responding to Lewis, Kendall said: "I know that I can look my constituents in the eye and say to them, I know that getting more people into better-paid jobs is the key to their future success."
Labour MPs Sarah Owen, Clive Efford, Florence Eshalomi and former shadow chancellor John McDonnell also voiced concerns about the changes in response to Kendall's statement.
Rachael Maskell, the Labour MP for York Central, said what concerned her the most was that the changes were announced without "talking to disabled people" as part of a consultation.
"That is really regrettable and something that I couldn't support," she told PoliticsHome.
She added: “We've got to find other ways of finding revenue, whether that's loosening the fiscal rules, whether that is a wealth tax, or whether that's about greater redistribution of resources around tax and spend at the Treasury.
"But one thing we shouldn't be doing is making some of the poorest people in our community pay more, and that is, of course, disabled people where three in 10 live in poverty."
“We've got to find other ways of finding revenue, whether that's loosening the fiscal rules, whether that is a wealth tax, or whether that's about greater redistribution of resources around tax and spend at the Treasury, but one thing we shouldn't be doing is making some of the poorest people in our community pay more, and that is, of course, disabled people where three in 10 live in poverty.”
The Institute For Public Policy Research think tank welcomed the government's focus on "supportive measures" to help people get back into work.
However, the IPPR's associate director for public services Avnee Morjaria warned that rushing reforms "to deliver savings will harm vulnerable people, many of whom depend on this support to live a good life in difficult circumstances.”
James Taylor, Executive Director of Strategy at disability equality charity Scope, urged the government to "think again".
Kendall said the government would not publish an impact assessment of the changes until next week when Chancellor Rachel Reeves delivers the spring statement.
Here are the changes announced by the government:
Personal Independence Payments
PIPs are a disability benefit designed to help those living with long-term health conditions or a disability cover the extra costs.
Today, Kendall confirmed that the government will not freeze inflation-linked rises to PIP and instead make it harder to be deemed eligible for the benefit, with the change to come into effect from November 2026.
The change comes amid concerns over a sharp uptick in the number claiming the benefit in recent years.
Recipients first have to undergo an assessment to claim PIP and Kendall said the government will launch a review of the PIP assessment to ensure it "is fit for purpose now and into the future".
Universal Credit
Kendall also said that the standard allowance in Universal Credit (UC) will rise by £775 by 2029-30.
It is part of a move to “rebalance” UC payments, meaning the health top-up will be reduced for new claimants.
The "failing system of reassessment" for Universal Credit will also be fixed, Kendall said. Those with the most severe disabilities and health conditions will never be reassessed under the changes "to give them the confidence and dignity they deserve" she added.
The government also announced that young people under 22 would no longer be able to access the health element of universal credit.
Work Capability Assessment
Kendall also announced that the Work Capability Assessment (WCA) would be scrapped in 2028
The WCA is an assessment undertaken to determine if people are fit for work and how much support they should receive
But Kendall said the assessment is "complex" and "time-consuming" and is based on a "can and can't work divide".
Kendall said that instead, extra financial support for health conditions in Universal Credit will be available purely through the PIPs assessment.
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