Chief political correspondent
It was left to Diane Abbott, who had the last question at PMQs, to ask about welfare, the highly contentious issue which has dominated this week and will be back atop the political agenda before long. She made the case - also made privately by Labour MPs across party factions - that the main motivation for these reforms being announced now is that Sir Keir Starmer and Rachel Reeves need about £10bn of savings for the Spring Statement next week. Why? Because the Office for Budget Responsibility (OBR) is thought to have told the Treasury that their "headroom", or leeway against meeting their own borrowing rules, has been wiped out by the rising cost of government borrowing. Kemi Badenoch made an argument today that the fact next Wednesday will be more significant than originally planned - essentially, the fact that the headroom has gone - is a sign that October’s Budget was a failure. Those in government argue that the rise in the cost of government borrowing has been driven mainly by global factors, which the government here could not have affected. The sensitivity of the welfare reforms shows why those economic questions which might at first blush seem dry and technical really matter, politically in Westminster and for millions of people across Britain.
Starmer is betting that hefty cuts to Britain’s welfare bill won’t alienate his party or turn off voters. After weeks of behind-the-scenes wrangling, the U.K.’s center-left government on Tuesday afternoon unveiled a sweeping package of reforms to Britain’s social security system, aimed at saving £5 billion a year by 2030. The reforms include controversial proposals to narrow the criteria for claiming disability support, and cuts to some health-related benefits.
Starmer has refused to rule out extending a stealth raid on income tax at next week’s spring statement. The Prime Minister was asked by Badenoch to give a commitment that he would not extend a freeze on income tax thresholds but he dodged the question. The Tory leader asked Starmer during Prime Minister’s Questions: “Winter fuel payments have been snatched. The jobs tax is hammering everyone from business to charities. The Chancellor promised a once in a parliament Budget that she would not come back for more. And in that Budget she said there will be no extension of the freeze in income tax thresholds. Ahead of the emergency Budget will he repeat the commitment that she made?” Starmer replied: “She has got such pre-scripted questions she can’t actually adapt them to the answers I am giving. I think she now calls herself a Conservative realist, well I am realistic about the Conservatives. The reality is they left open borders... they trashed the economy... the NHS was left on its knees and they hollowed out the armed forces.” The current freeze on income tax thresholds is due to run until April 2028. Reeves did not extend the freeze when she delivered her first Budget in October last year but there has been speculation the Chancellor could make the move when she delivers her spring statement on March 26.
The rising benefits bill is “devastating for public finances” and has “wreaked a terrible human cost,” Starmer has said as he defended the government’s drastic changes to the welfare system. Writing in the Times, the prime minister said “the facts are shocking”, noting one in eight young people were not in education, employment, or training and 2.8 million working-age people were out of work because of long-term sickness. Starmer said the picture was a “damning indictment of the Conservative record.” He stated: “Young people shut out of the labour market at a formative age. People with complex long-term conditions, written off by a single assessment. People who want to return to work, yet can’t access the support they need. All this is happening at scale and it is indefensible. An affront to the values of our country and Labour’s history.”
While most Labour MPs accept the figures are unsustainable, many have struggled to digest the government’s proposed changes to eligibility criteria for the personal independence payment (PIP), a benefit aimed at helping people with disability or long-term illness deal with increased living costs, and its proposal to delay access to the health element of universal credit until a young person is 22. Quick Guide: What mental health and benefits support is available? Mental health support is provided by organizations like Mind and Samaritans.
The social security minister, Stephen Timms, said people with conditions such as anxiety would still be able to claim PIP if the effect on their wellbeing was deemed severe enough. But the proposed changes mean people will need to score a minimum of four points in at least one activity to qualify for the “daily living element” from November 2026, which is a high threshold. About a million people will completely lose their right to PIP benefits, according to the Resolution Foundation, and the government has refused to release its impact assessment until next week.
Labour MPs were invited to a briefing with Timms on Tuesday night to get more insight on the government’s changes and share their concerns. Only a dozen MPs turned up, despite many more being expected to vote against the government’s plans. “They scheduled it at the last minute as the children’s wellbeing bill was being debated and voted on,” a Labour insider said. “They don’t actually care if anyone has any dissent to vocalise; no one thinks it’ll make a difference at this stage. This is an ideological pursuit. If they wanted to find money elsewhere they could.” The backlash was in full swing on Tuesday as Kendall took almost 100 questions from MPs, many of them from Labour, as she outlined the case for her green paper.
Debbie Abrahams, the chair of the Commons work and pensions committee, stated: “There are alternative, more compassionate ways to balance the books rather than on the back of sick and disabled people.” She told the Commons the government’s plans to cut £5bn from benefit support was the largest reduction in welfare support since 2015. The Disability Benefits Consortium, an umbrella body representing more than 100 charities and organisations, said the “devastating cuts will push more disabled people into poverty and worsen people’s health.”
Pushing forward, Timms told Sky News the government was considering extending disability living allowance to parents after the death of a child they had given up work to care for “just to support parents during what otherwise is obviously a terribly, terribly difficult time for them.” The minister did not rule out further benefit cuts in the future, as he told Times Radio: “Who knows what will happen in the next five years?”
