Revealed: Labour's welfare cuts will take people out of work

New Statesman​

a day ago

Photo byThe government's disability benefit cuts would force people out of work or to reduce their working hours, according to new research by the Money and Mental Health Policy Institute – the charity led by Martin Lewis, the consumer champion.
Labour's plans to tighten assessments for the personal independence payment (PIP) will affect around 800,000 claimants. The benefit, designed to help people with disabilities and chronic mental and physical conditions live an independent life, is currently paid to more than 3.6 million people.
Ministers insist their welfare reforms will bring more people 'back into work'. But nearly two thirds of working people receiving PIP surveyed by the charity said they would need to reduce or give up work without the payments. Reasons cited include the impact losing the benefit would have on their mental health, and practical considerations such as covering the transport costs of travelling to work.
'PIP pays for [my] private therapy… which keeps my mental health at a functioning level,' one respondent told the researchers. 'Without these I doubt I could even manage the permitted work hours (14 hours per week) that I do.'
'PIP has allowed me to get a job where I work 12 hours a week,' another claimant said. 'This has helped with getting me out of my house and helped with my depression… PIP allows me to go to my job, get to appointments, get out to see family and friends.'
People losing their PIP who were surveyed said they expect to significantly reduce their spending – including 77 per cent saying they would have to limit their spending on public transport, 87 per cent on private transport (such as taxis), 82 per cent on clothing and other essentials, 81 per cent on personal care, and 70 per cent on child-related costs – all essential parts of a functioning work life.
The income shock of losing PIP under the proposed reforms would cause a 'terrifying triple whammy' of financial hardship, worsening mental health and reduced capacity to work for many people with mental health problems, according to the researchers. Claimants surveyed stand to lose £3,850-£5,750 a year if the cut goes ahead. Nearly all – 97 per cent – of respondents said the PIP changes would have a 'significant negative impact' on their mental health.
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'The government says its welfare reforms will help more people move into work. But you don't do that by depriving people of a critical financial lifeline that helps them stay well,' said Helen Undy, chief executive of the Money and Mental Health Policy Institute. 'Our analysis shows that these changes would actually result in many people with mental-health problems who have a job cutting their hours or leaving the workplace altogether. We urge the government to ditch these plans.'
Adding ever-more restrictions to the welfare system to boost employment sounds logical, but it doesn't play out this way in the real world. As I have written before, the Department for Work and Pensions' fixation with cranking up 'conditionality' (the requirement to meet certain demands to avoid having your benefits docked) over successive governments has had little effect on working hours. While the number of claimants subject to conditionality has more than doubled since 2013, the evidence for its effect on working hours is 'inconclusive', according to the Resolution Foundation, a living standards think tank.
Instead, with each harsher measure, working and non-working people are losing the support they need to live full and functional lives. A former DWP adviser once told me that, at best, 'harsh and prescriptive conditionality… pushes people into low-paid and insecure work, which is a poor outcome for them but also means they're likely to continue to need support to top up their incomes'.
Martin Lewis, known as the Money Saving Expert, has spent his career pursuing value for money. He knows a false economy when he sees one.
A government spokesperson said: 'The majority of people who are currently getting PIP will continue to receive it. Our reforms will help sick or disabled people move out of poverty and into good, secure jobs, while ensuring the social security system will always be there for those who will never be able to work.
'We are consulting on how best to support those impacted by the new eligibility changes, and have also announced a review of the PIP assessment, working with disabled people and key organisations representing them to consider how best to do this.'
[See also: How the weather changed on the 'cruel' two-child benefit cap]
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