Disability benefit claimants to rise by 750,000 despite Starmer reforms

Telegraph

5 hours ago

The number of people claiming disability benefits in Britain will jump by 750,000 over the next five years despite Sir Keir Starmer's attempt to reduce the welfare bill, the Government has admitted.
An official impact assessment of Labour's benefits reforms found that the total cost of two disability benefits would increase by £8 billion by 2030 as the number of claimants continued to soar.
The rate will rise despite a crackdown on the criteria for some benefits by Sir Keir that prompted a rebellion from Labour backbenchers.
There are around five million people currently claiming disability benefits in England and Wales, including 3.7 million on PIP (personal independence payment) and a further 1.4 million on disability living allowance (DLA).
The Government had warned that figure was set to spiral in the coming years without reform to the benefits system, because of a large increase in claimants with mental health conditions and a rise in fraud.
But even with Labour's changes, the number will increase by 750,000 people by 2030, while costs will increase from £23 billion to £31 billion a year.
Labour's changes include a new, tougher criteria for PIP, as well as a cut to the sickness-related element of Universal Credit (UC).
Ministers estimate that these reforms will save £5 billion a year by the end of this Parliament.
Liz Kendall, the Work and Pensions Secretary, previously said there were 1,000 new PIP awards every day, which she described as adding a city the size of Leicester to the welfare books every year.
On Wednesday, the Government laid the legislation to enact its welfare reforms, which Ms Kendall said marked 'the moment we take the road of compassion, opportunity and dignity'.
But Labour rebels pointed to the Government's own figures showing that 250,000 more people, including 50,000 children, are likely to fall into poverty by 2030 because of the changes.
The impact assessment on Wednesday confirmed previously published estimates that changes to PIP entitlement rules could see about 800,000 people lose out, with an average loss of £4,500 per year.
The changes to UC are expected to mean an estimated 2.25 million people lose an average of £500 per year.
The UC losses are to people claiming an additional rate of the benefit because they have a 'limited capacity to work', which the Government says encourages jobless people not to go back into employment.
Ministers argue that 3.9 million households who do not claim the extra allowance will gain an average of £265 each year from an increase to the standard allowance.
Rebel MPs have secured a concession from ministers that PIP and UC claimants losing some benefits will be given a 13-week financial support package, up from a planned four-week package.
But documents show the Government has ignited fury from Labour MPs without securing an overall reduction in the cost of welfare, while the number of people claiming disability benefits will rise by around 15 per cent.
The £8 billion cost increase under the new system is equivalent to around five times the annual revenue that Labour says it will receive from imposing VAT on private schools, and more than the cost of building Britain's two aircraft carriers.
The impact assessment said that without reform, the cost of working-age sickness and disability benefits would have increased by £18 billion a year to a total £70 billion.
'The increase alone is more than the entire police budget,' the document said.
Ms Kendall told MPs that Britain's social security system was 'at a crossroads' as a result of rising costs since the pandemic.
She said: 'Unless we reform it, more people will be denied opportunities, and it may not be there for those who need it.
'This legislation represents a new social contract and marks the moment we take the road of compassion, opportunity and dignity.
'This will give people peace of mind, while also fixing our broken social security system so it supports those who can work to do so while protecting those who cannot.'
Sir Keir said he was 'determined' to ensure the reforms go through because he feels the welfare system 'doesn't work for anyone'.
'It doesn't work for those that want to get back to work, and it certainly doesn't work for the taxpayer,' the Prime Minister told ITV, adding that 'those that need to be protected should be protected'.