logo
Welfare reforms: What concessions has the Government made?

Welfare reforms: What concessions has the Government made?

Leader Live7 hours ago

Here, the PA news agency takes a look at what the changes are and how Labour MPs and disability groups have reacted.
– What had the Government originally planned?
In March, reforms to the welfare system – aimed at encouraging more people off sickness benefits and into work – were announced.
The Government said the changes, including restricting access to the main disability benefit known as Pip (personal independence payment) and the sickness-related element of universal credit (UC), were expected to make welfare savings of £4.8 billion by 2029-30.
With around 1,000 new Pip awards every day – 'the equivalent of adding a city the size of Leicester every single year', the Government argued the current situation was unsustainable.
An impact assessment published alongside the Bill included estimates that changes to Pip entitlement rules would see about 800,000 people lose out, with an average loss of £4,500 per year.
Changes to UC were expected to see an estimated 2.25 million current recipients of the health element impacted, with an average loss of £500 per year.
Overall, as a result of the changes, it was estimated some 250,000 more people, including 50,000 children, across Great Britain were likely to fall into relative poverty after housing costs by the end of the decade.
– What concessions have been made?
In a late-night letter to MPs, Work and Pensions Secretary Liz Kendall conceded two changes she said would 'strengthen the Bill'.
In recognition of the 'uncertainty and anxiety' caused by the proposed changes, she said all current Pip recipients would keep their benefits, saying only new claims from November 2026 will come under the tightened eligibility requirements.
An impact assessment had stated that 370,000 current recipients were set to lose Pip entitlement across England and Wales.
Ms Kendall also vowed all those currently receiving the UC health element, as well as new claimants meeting the severe conditions criteria, will have their incomes 'fully protected in real terms'.
The Work and Pensions Secretary has also promised a review of the Pip assessment, led by social security and disability minister Sir Stephen Timms, which will have input from disabled people 'to ensure the benefit is fair and fit for the future'.
– What are disability groups saying?
Mikey Erhardt, from Disability Rights UK, accused the Government of 'playing politics with our lives', insisting the Bill must still be pulled.
He said the changes will mean 'a benefits system where future generations of disabled people receive less support than disabled people today' and added that, in making the original announcement of cuts, the Government had 'prioritised balancing its books over improving the lives of disabled citizens'.
Mr Erhardt added: 'Despite seemingly rowing back on some of the worst aspects of its plans, the Government is still attempting to slash billions of pounds from a system that doesn't provide enough support as it stands.'
The MS Society said the Government was simply 'kicking the can down the road and delaying an inevitable disaster', and urged MPs 'not to be swayed by these last-ditch attempts to force through a harmful Bill with supposed concessions'.
Food bank network Trussell welcomed the 'significant' concessions but said the proposals 'still present a bleak future for future claimants and still risk placing the Government's commitments to end the need for emergency food and tackle poverty in serious jeopardy'.
– What are Labour MPs saying?
Dame Meg Hillier, one of the leading rebel voices, described the concessions as 'a good deal' involving 'massive changes' to protect vulnerable people and involve disabled people in the design of future reforms.
She said: 'It's encouraging that we have reached what I believe is a workable compromise that will protect disabled people and support people back into work while ensuring the welfare system can be meaningfully reformed.'
Health minister Stephen Kinnock said he is confident the welfare reforms – being brought under the Universal Credit and Personal Independence Payment Bill – will pass a vote in the Commons on Tuesday in the wake of the concessions.
But some Labour MPs are still not satisfied, with Nadia Whittome saying the concessions are 'nowhere near good enough', vowing to still vote against the Bill unless 'serious' proposals are made to 'protect the dignity of disabled people'.
Speaking to the Today programme on BBC Radio 4, she said MPs she had spoken to 'are sticking to their position because we understand that we are answerable to our constituents'.
Ms Whittome added: 'If the Government doesn't pull the Bill, doesn't consult properly with disabled people and come back to MPs with a serious proposal that protects the dignity of disabled people, I will vote against and I will be far from the only one.'

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

The real Starmer has this week revealed himself: a Corbynista in a Blairite suit
The real Starmer has this week revealed himself: a Corbynista in a Blairite suit

Telegraph

time6 minutes ago

  • Telegraph

The real Starmer has this week revealed himself: a Corbynista in a Blairite suit

It's the spinelessness of it all that gets me. We knew Keir Starmer was weak. We knew it when he recorded a leadership pitch in 2020 that could have been directed by Ken Loach – only to emerge as some sort of budget Tony Blair impersonator in office. Deep down, we knew what we were getting; no one could have seriously believed the Prime Minister, a self-professed socialist who served so willingly under Jeremy Corbyn wouldn't do exactly this to the country. But did we think the capitulation would happen this quickly and under so little pressure? After 14 years of Conservative calamity, which left a trail of broken promises in its wake, people could have been forgiven for hoping this self-styled beacon of 'stability and moderation' would at least try to fulfil his pledge of a 'government unburdened by doctrine, guided only by a determination to serve your interests'. When he called, on the steps of Downing Street, for a 'return of politics to public service,' and vowed to 'tread more lightly on your lives', things were that bad that voters gave him the benefit of the doubt. After the horror of Covid, the cost of living crisis, the embarrassment of Liz Truss's premiership, and record numbers of illegal immigrants arriving here by boat, they thought to themselves: well, it can't get any worse. 'Country first, party second,' Starmer vowed and people thought, maybe, just maybe, this respectable lawyer would put the needs of the electorate first. But no. Instead we have ended up with something far worse than the Tories could ever muster. In Starmer, we have not just ended up with a Butlin's Blair but a cut-price Compo; a coward leading a craven cabinet. Until now, I thought lily-livered Labour was best summed up by Starmer's complete inability to say whether he supported the US air strikes on Iran's nuclear sites. Kemi Badenoch was unequivocal in her support of Donald Trump's attempts to ensure we can no longer be nuked by murderous mullahs hellbent on wiping Israel from the map along with any of her allies. So was Nigel Farage. It shouldn't be a difficult question for any politician with the faintest concern for the preservation of western civilization. Still, handwringing Starmer struggled, calling for more negotiation with a regime that once described America as the Great Satan, murders women for removing their hijabs, throws gays off buildings and funds terrorist Hamas, Hezbollah and the Houthis to kill Jews (and anyone else in their path). So far, so invertebrate, and then, on Friday, Starmer took another step down the yellow brick road by giving an interview to the Left-leaning Observer, in which he expressed ' deep regret' for saying that Britain risked becoming an 'island of strangers ' because of mass migration. Insisting it 'wasn't right' to use 'that particular phrase' in a speech last month, despite No 10 previously insisting that he stood by his words, he said neither he nor his speechwriters had been aware that the remarks could have been interpreted as an echo of the language of Enoch Powell. 'I wouldn't have used those words if I had known they were, or even would be interpreted as, an echo of Powell. I had no idea – and my speechwriters didn't know either. 'But that particular phrase – no, it wasn't right. I'll give you the honest truth – I deeply regret using it.' Have you ever heard such weapons-grade gaslighting? If it wasn't gutless enough to be backtracking on the speech, to then suggest that no one in No 10 considered that it might be a bit Rivers of Bloodish is an insult to anyone with even the most rudimentary understanding of British politics. To make matters worse, Never Here Keir then went on to whine that he 'wasn't in the best state to make a big speech' because he'd just come back from a three-day trip to Ukraine. Boo hoo. Try being Volodymyr Zelenskyy for a week, you big sissy. Good grief. The mea culpa came less than 24 hours after he agreed to water down his controversial welfare reforms to stave off a massive rebellion. On Wednesday, covering for lesser spotted Starmer at PMQs, Deputy Prime Minister Angela Rayner insisted that the Government would not back down on its proposals to cut nearly £5 billion from the welfare bill by limiting access to disability payments. It took less than two days for Sir Keir to cave in, offering compromises that will wipe out at least a third of the savings the Chancellor had banked on making through welfare reform. After the similarly feeble U-turn on the winter fuel allowance cuts, tax rises now look like a certainty come the autumn Budget. So not only is the benefits bill going to continue to rise, working people are once again going to have to pay the price thanks to the inadequacy of our current administration. Almost a third of all income tax revenue and National Insurance contributions are being spent servicing the nation's total welfare budget which has ballooned by £86 billion compared to a decade ago, totalling £296 billion in 2023-24, the last year for available data. But instead of tackling this behemoth on behalf of a nearly bankrupt nation, Starmer has opted to save his own skin. It's not just spineless, it's shameful. We used to believe Britain under Blair was a Left-wing country. But how foolish that seems now, under his successor. Margaret Thatcher had created the conditions for people to work, to save, and to own their homes. People still believed in a 'hand up' and not a 'hand out'. Look at us now, once again expecting the state to solve all our problems. Aspiration, entrepreneurialism, good old fashioned graft; all these courageous qualities have been quashed by pusillanimous, progressive politicians living in a fantasyland where there are no trade-offs, just ever more government spending funded by soaking 'the rich''. And the worst of them all is socialist Starmer – a man with so little backbone he can't even stand up to his own MPs.

Reeves expected to extend stealth raid on income tax
Reeves expected to extend stealth raid on income tax

Telegraph

time7 minutes ago

  • Telegraph

Reeves expected to extend stealth raid on income tax

Rachel Reeves is expected to freeze income tax thresholds in her autumn Budget to fill a £40 billion black hole. The Chancellor has been put under pressure by three policy U-turns by Sir Keir Starmer, which are set to increase public spending by about £4 billion later in the year. Some within the Labour Party believe she may not survive the year if she is forced to raise taxes and impose further cuts at the same time. The latest policy reversal, on benefit cuts, will mean the Government will save just half of the £5 billion it hoped to recoup from sickness and disability payments. But Ms Reeves has left herself with few options to raise funds. As well as committing not to increase the rates of income tax, National Insurance or VAT, nor to raise corporation tax, she has insisted she will not break Labour's fiscal rules. Freezing the threshold for the additional rate of income tax was one of the suggestions in a memo from Angela Rayner, the Deputy Prime Minister, to Ms Reeves which was leaked to The Telegraph last month. The current freeze, which was due to be lifted in 2028, dragged seven million people into higher tax brackets last year, raising around £15 billion. Paul Johnson, the director of the Institute for Fiscal Studies, an independent think tank, said a further freeze in thresholds would be 'pretty high up the attractiveness scale' in this year's Budget. 'I think it's fairly likely, as a politically easy way to raise something of the order of £10 billion in additional revenue by the end of the Parliament,' he told The Telegraph. One Labour MP said the Chancellor was now 'in deep trouble' because she has already ruled out several of the easiest ways to raise revenue. 'It's hard to forgive her for where we are now. She locked herself in, foolishly, to a set of commitments that have become unsustainable,' the MP said. The Treasury was already facing a black hole of between £20 billion and £30 billion because of lower-than-expected growth forecasts, partly driven by Donald Trump's imposition of tariffs. The £4 billion cost of Sir Keir's U-turns is expected to be compounded by a revision to the Office for Budget Responsibility's (OBR) medium-term productivity forecast this summer and growth forecast this autumn, which could have an impact on revenues of between £7 billion and £8 billion. This week's decision to maintain benefit payments for existing claimants has cost the Treasury £2.5 billion, while the U-turn on winter fuel payments for pensioners cost a further £1.25 billion. Ms Reeves is facing backlash from Labour MPs over her proposal to cut benefits, which was designed to bring down the cost of welfare at the expense of thousands of claimants. Sir Keir, who watered down the measures to avoid the biggest rebellion of his career, insisted that his 'common sense' welfare reforms now strike 'the right balance'. But the situation leaves the Chancellor with little choice but to freeze income tax thresholds, which were due to rise in line with inflation from 2028. The policy would likely raise around £8 billion a year in tax receipts, but would cost a worker earning on an average salary thousands more in income tax by the end of the decade. Independent economists say a further freeze in the autumn is now all but certain, and that further increases on smaller taxes or a new raid on pensions could be required to make up the shortfall. Downing Street refused to rule out further tax rises on Friday, with a spokesman saying: 'As ever, as is a long-standing principle, tax decisions are set out at fiscal events.' However, Ms Reeves's team remains optimistic that good economic performance between now and the Budget will reduce the £105 billion cost of servicing government debt, which currently accounts for 8.2 per cent of public expenditure. The Bank of England is widely expected to cut interest rates at its next meeting on Aug 7, although gilt yields are not directly determined by the base rate. Treasury officials also hope that the cost of energy will continue to fall, although it is acknowledged that instability in the Middle East could drive up the price of crude oil once again. Ms Reeves is adamant that she will not break her fiscal rules – to increase public sector borrowing as a percentage of GDP or raise money on the markets to fund day-to-day spending – and believes that maintaining market stability should be the Government's primary goal. Balancing the books with a stealth tax on income has been a favoured policy lever of successive chancellors. The current freeze to 2028 was introduced by Sir Jeremy Hunt in his 2022 Budget. But the policy results in more people paying higher rates of income tax as their wages increase – an economic phenomenon known as fiscal drag. OBR figures show that in 2024-25, some £15.3 billion extra was due to be raised thanks to the frozen thresholds. In the same year, the OBR predicted that the total welfare bill was set to shoot up by £16.6 billion. Figures released on Thursday show that seven million people have been dragged into paying higher rates of income tax as a result of the stealth raid on wages. Frozen thresholds forced an extra 520,000 taxpayers into the 40p bracket in the last year, according to estimates by HMRC. It brings the total to just over seven million in 2025-26, a 60 per cent rise from the 4.4 million in 2021-22 when income tax thresholds were first frozen under the Tories. The number of 45p additional-rate taxpayers has more than doubled from 520,000 to 1.2 million over the same period. Last November, Ms Reeves told MPs she would not raise taxes again or increase borrowing and that the Government would need to 'live within the means we've set ourselves' for the remainder of the Parliament. 'We're not going to be coming back with more tax increases, or indeed more borrowing,' she told the Treasury select committee.

Labour MPs call for 'reset' from No 10 after 'year of poor management'
Labour MPs call for 'reset' from No 10 after 'year of poor management'

The National

time10 minutes ago

  • The National

Labour MPs call for 'reset' from No 10 after 'year of poor management'

It comes as the fallout from the welfare rebellion, which saw 129 Labour MPs oppose Keir Starmer's plans to cut £5 billion from disability payments, threatens to cause lasting damage. A late-night climbdown on the cuts from Number 10 may have seen off the threat of Starmer's first major Commons defeat, with rebels suggesting they now expect the Universal Credit and Personal Independence Payment Bill to pass its first hurdle on July 1. But speaking to the PA news agency, a number of Labour backbenchers expressed deeper frustration with how Downing Street has handled its backbenchers since last year's election. READ MORE: Can Keir Starmer find any policy that Anas Sarwar won't support? One warned that discontent and low morale among MPs would 'continue to fester' without a 'wider reset' in relations between Number 10 and the Parliamentary Labour Party after 'a year of poor party management'. Another accused decision-makers in Government of operating as an 'exclusive club' and showing 'disregard' for both backbenchers and experts outside Westminster. They told PA: 'I think the Government have got to stop pretending they know everything and start listening, because they might learn something.' Several backbenchers pointed to the Prime Minister's words at a press conference on Wednesday, in which he referred to keeping a 'focus on the change that we want to bring about' rather than the 'noises off'. Although Government sources suggested Starmer was talking in more general terms, rebels have taken his 'noises off' comment as referring to them. Prime Minister Keir Starmer has angered his own backbenchers (Image: Paul Currie/PA Wire) One said: 'A lot of colleagues are sickened at language being used, from the PM's 'noises off' to the senior source saying they thought Keir and Morgan [McSweeney, the Prime Minister's chief of staff] had cleansed the party of self-indulgent rubbish.' But their frustration is not shared by all Labour backbenchers, with others suggesting Friday's U-turn on welfare cuts shows Downing Street is willing to listen. One told PA: 'They're a new team, they're a year in and occasionally teams do need to have a moment where things come to a head and they learn.' Arguing that some backbenchers needed to 'chill out and have a cup of tea', they added they thought the Prime Minister had 'clocked that it's important that we work as part of a team. READ MORE: Labour's 'minor' climbdown will leave benefits system 'woefully inadequate' 'All of us want him to succeed and all of us want the Government to succeed,' they said. One rebel said that he remains opposed to the bill and described the welfare system in the UK as 'in a mess'. Dr Simon Opher, who represents Stroud, said in a statement that he is glad the Government 'are listening', but that the changes 'do not tackle the eligibility issues that are at the heart of many of the problems with Pip'. 'The bill should be scrapped and we should start again and put the needs of disabled people at the centre of the process,' he said. A Number 10 spokesperson insisted on Friday that the Prime Minister 'remains fully committed to engaging with parliamentarians'. Reports said that the concessions had cut the number of rebels to around 40-50, who are expected to sign a new amendment opposing the passage of the bill.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store