Government Plans to Cut Disability Benefits Face Backlash
Plans aimed at saving billions of pounds through a crackdown on disability benefits are likely to backfire, potentially igniting a public backlash comparable to the controversial decision to reduce winter fuel payments, a prominent figure from the Blair-era Labour government has warned. John McTernan, who served as a special adviser during that time, emphasized that the Government is making a “foolish and dangerous” mistake by conflating long-term sickness with disability.
The Government is reportedly targeting £6 billion in welfare savings, with a staggering £5 billion anticipated to come from tightening eligibility for Personal Independence Payments (PIP). These payments are crucial for individuals who require additional financial assistance to maintain independence in their daily lives.
Additionally, ministers are contemplating a freeze on PIP payments for the upcoming year, which would mean that these payments would not increase in line with inflation. This freeze could result in a loss of up to £350 annually for claimants.
Meanwhile, Rachel Reeves is under pressure to secure funding ahead of the Spring Statement, aiming to avert cuts to public services. Following a lackluster economic performance, her “fiscal headroom” from the autumn Budget has diminished. Analysts from Capital Economics predict that the Chancellor’s available funds will dwindle to a deficit of £1.6 billion. To recover the £9.9 billion headroom that existed post-October Budget, Reeves would need to identify an additional £11.5 billion annually by the fiscal year 2029/30.
As Sir Keir Starmer braces to confront a wave of discontent from concerned MPs at a Parliamentary Labour Party (PLP) meeting, dissenters warn that the Government risks repeating the mistakes of Tony Blair, who was compelled to reverse plans in 2001 that aimed to scrutinize disabled welfare claimants. This occurred despite Blair’s earlier success in implementing contentious benefit cuts for single-parent families, which had also incited significant rebellion.
According to McTernan, who later became Tony Blair’s political secretary, the backlash against welfare reform was predominantly driven by the disability community. He noted in The i Paper, “The one lobby that defeated Tony Blair’s welfare reforms wasn’t lone parents; their cuts were enacted despite intense opposition. It was the proposed disability cuts that were ultimately abandoned once they were introduced. The disability lobby holds considerable influence because disability is a widespread issue across the nation.”
He cautioned that moving forward with these cuts could provoke a response similar to the backlash generated by the Chancellor’s decision to means-test the previously universal winter fuel payment for pensioners—a move that has since faced significant public criticism.
McTernan also remarked that PIP functions differently than out-of-work incapacity benefits, as it provides financial support to assist with living costs associated with a disability, regardless of employment status. He stated, “The Government is dangerously blurring the lines between long-term sickness and disability, and they have not put forth a coherent rationale for these changes.”
He added, “Labour tested the public’s tolerance when it unexpectedly withdrew winter fuel payments from 10 million pensioners. They risk alienating support for the benefit cuts they are currently promoting.”
Rebel MPs have raised concerns that these plans will “push disabled individuals deeper into poverty,” asserting that the dissent is not confined to a small faction of left-wing members. However, The i Paper reports that Labour whips remain doubtful about claims that as many as 80 MPs are poised to rebel. While any proposed changes will not necessitate a vote in the House of Commons, MPs are hopeful that they can sway Reeves and Work and Pensions Secretary Liz Kendall to reconsider their stance on these plans, with the latter engaging in one-on-one discussions with apprehensive colleagues.
The Government justifies its need for welfare reform by highlighting a significant increase in the number of individuals receiving disability benefits, which rose by nearly half a million within a year, totaling 4.8 million by August. A Labour rebel disclosed that “numerous conversations” are occurring among colleagues, with the rebellion being organized by Debbie Abrahams, chair of the Work and Pensions Select Committee, who is regarded as a respected figure and not typically associated with left-wing politics. “I believe there are many MPs who are discontent,” they stated. “I am certainly unhappy with any proposals to cut PIP because we know its purpose: to assist with the extra costs associated with living with a disability. Any reduction in that support will only drive disabled individuals further into poverty.”
Another Labour MP expressed, “I have numerous instances from my constituency of individuals who are being let down by the system, some of whom are dying or facing mental health crises and struggling to access treatment or having to take the DWP [Department of Work and Pensions] to tribunal. We need to address the system before labeling people as lazy.”
On the other hand, some Labour MPs are rallying behind the planned changes. One MP representing a “Red Wall” constituency suggested that a welfare crackdown might bolster Labour’s stance against the encroachment of Nigel Farage’s Reform Party. “For too many voters, Labour has become synonymous with benefits, immigrants, and minorities. We managed to escape the repercussions of that negative image this time due to the Tories’ incompetence. But we won’t be so fortunate next time,” they argued.
Potential Cuts to Disability Benefits Could Hurt Claimants
Disability benefit recipients are poised to experience real-term reductions in their income under the government’s proposed measures to halt inflationary annual increases. Sources have confirmed that ministers are contemplating a pause on the automatic uprating of Personal Independence Payments to align with inflation. These plans, initially reported by ITV News, are part of a broader initiative to achieve approximately £6 billion in welfare savings.
Currently, disability benefits are linked to inflation to ensure their value does not erode against the rising cost of living, while out-of-work benefits do not receive the same automatic adjustments. This discrepancy has not only escalated the costs associated with disability benefits but has also been argued to have incentivized an increase in new claimants. Freezing disability benefits for 2026, while simultaneously raising universal credit, may encourage more individuals to shift to unemployment benefits, subsequently compelling them to seek employment.
Eligibility criteria for PIP, which is presently determined solely by an individual’s physical ability rather than their income or employment status, is also anticipated to become more stringent. However, government sources have refrained from providing details on whether the new criteria will focus on specific medical conditions.
The cost of sickness and disability benefits for working-age individuals has surged by £20 billion since the pandemic and is projected to reach £70 billion over the next five years. Downing Street has labeled this increase in taxpayer expenditure as “unsustainable,” with an upcoming Health and Disability Green Paper expected to outline strategies for reducing costs.
Chloe Chaplain, Senior Political Correspondent, noted that 16 major charities have expressed that cutting disability benefits in the forthcoming green paper would have a “catastrophic impact.” When questioned about the letter from disability rights organizations, the Prime Minister’s official spokesperson commented, “We aim to restore trust and fairness in the system, ensuring that disabled individuals receive better support from the state to lead more independent lives. We will always maintain a safety net for those who are most in need, and we will collaborate closely with disabled people and their organizations as we develop these reforms to ensure their perspectives shape our proposals.”
