Up to 1.2 million people with disabilities will lose thousands of pounds under the government’s welfare overhaul, experts have said, as campaigners warn the plan will exacerbate the country’s mental health crisis and push more children into poverty.
Liz Kendall, the work and pensions secretary, laid out her long-awaited changes to the benefits system on Tuesday, announcing a set of measures aimed at getting more people into work and saving £5bn by reducing disability payments.
But with experts warning the plans will reduce the incomes of more than 1 million people, ministers are braced for the biggest rebellion yet of the Labour government, with as many as 30 MPs expected to vote against the plans within weeks.
Kendall told the Commons on Tuesday: “We believe that unleashing the talents of the British people is the key to our future success. But the social security system that we inherited from the Conservatives is failing the very people that it is supposed to help and is holding our country back.”
In a sign of the growing pushback which ministers now face, Debbie Abrahams, the Labour chair of the Commons work and pensions committee, warned against “balancing the books on the backs of sick and disabled people”.
Kendall’s changes amount to the biggest shake-up of Britain’s welfare system since universal credit was introduced over a decade ago, and come after years of unsuccessful attempts to bring down the numbers of people claiming long-term sickness benefits.
Britain is unique among European countries in not having cut those numbers to pre-pandemic levels. Kendall told the Commons on Tuesday that spending on working-age sickness and disability benefits was up £20bn since the pandemic, and was forecast to rise by a further £18bn by the end of this parliament to £70bn a year.
Much of Kendall’s package of measures is aimed at reducing incentives to stay out of work. The work and pensions secretary is scrapping the system of giving higher incapacity payments for those unable to work than to those who can, in a bid to make sure as many people as possible are looking for work.
There will also be a new “right to work” scheme for those on incapacity benefits so they can try to return to work without risking losing their entitlements.
People under the age of 22 wanting the health top-up to universal credit will no longer qualify under plans being consulted on, with the savings being reinvested in work and training schemes to help get them into the workplace.
But the most financially significant decision is Kendall’s plan to introduce drastically tighter limits for who can claim personal independence payments (Pips), which are intended to help people with their quality of life and are not connected to employment. The Pip savings will help the chancellor, Rachel Reeves, stick to her fiscal rules when she announces her spring statement next week.
Under the new system, people who cannot cook a simple meal for themselves but can heat food up in a microwave would not be eligible for the payments unless they have other needs to be taken into account. Needing assistance to wash their hair or their body below the waist would also be judged as insufficient to claim the payments, which are currently worth up to £185 a week.
Ministers will not lay out where exactly the £5bn savings are coming from until next week, though officials indicated most would come from reduced Pip spending. The Resolution Foundation thinktank said the plan would see between 800,000 and 1.2 million people losing support of between £4,200 and £6,300 a year by 2029-30.
Louise Murphy, a senior economist at the Resolution Foundation, said: “Around 1 million people are potentially at risk of losing support from tighter restrictions on Pip, while young people and those who fall ill in the future will lose support from a huge scaling back of incapacity benefits.
“While it includes some sensible reforms, too many of the proposals have been driven by the need for short-term savings to meet fiscal rules, rather than long-term reform. The result risks being a major income shock for millions of low-income households.”
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The Institute for Fiscal Studies warned a further 600,000 people would lose £2,400 a year in universal credit payments because of plans to replace the work capability assessment with the much tighter assessment for Pips.
Sarah Hughes, the chief executive of the mental health charity Mind, said: “Mental health problems are not a choice – but it is a political choice to make it harder for people to access the support they need to live with dignity and independence. These reforms will only serve to deepen the nation’s mental health crisis.”
Ministers are preparing to put the Pip changes to a vote in the Commons as soon as May, with dozens of Labour MPs warning they are willing to rebel. The potential rebels include several who were first elected last year who have so far remained overwhelmingly loyal to the government.
Neil Duncan-Jordan, the newly elected MP for Poole, said: “There is a genuine concern that tightening the eligibility criteria for Pip will plunge more disabled people into poverty. Benefits are already far from generous, so this is going to feel particularly cruel.”
Terry Jermy, who beat Liz Truss in South West Norfolk last year, did not say how he intended to vote, but said: “I am disappointed that there are things in there that will make more difficulties for disabled people, particularly in relation to Pip.”
Jermy, who helped his father claim Pip for 10 years after he had a stroke, added: “I really dispute this idea that it’s too easy to claim Pip.”
Another new Labour MP said: “I don’t blame Liz [Kendall] for any of this but the reality is this will make a considerable number of my constituents a lot poorer. And that’s not what we came here to do.”
One of their colleagues added: “There is plenty I like about this package. I’m still not going to vote for it.”
