Latest news with #poverty
The Independent
14 hours ago
- Business
- The Independent
Welfare cuts will still plunge thousands into poverty despite U-turn, MPs warn
Tens of thousands of people are still at risk of being pushed into poverty due to Labour's welfare cuts despite last-minute changes to the plans, a group of MPs has warned. Around 50,000 people who become disabled or ill will face poverty by the end of the decade because of the remaining reforms, the cross-party Work and Pensions Committee has found. A cut to the health-related element of Universal Credit (UC health) which will take effect from April next year and will see monthly payments nearly halved for most new claimants, dropping from £423.27 to £217.26. At the same time, the standard rate of Universal Credit will increase for all claimants by £17.39 a month, from £400.14 to £417.53. This marks the first time the benefit has been uprated above the inflation rate (CPI). These extra-inflationary increases will continue until at least 2029/30, by which point they will amount to an extra £725 in cash terms for a single person aged 25 or over, the Department for Work and Pensions (DWP) says. The committee welcomed this 'much-needed and long-overdue increase' but added that its MPs remain critical of the 'failure' to assess the impact of UC health cuts on poverty, health and employment. This is now the main measure that the bill will deliver after the government removed changes to the Personal Independence Payment (PIP) following the threat of a major backbench rebellion by over 100 Labour MPs. The health and disability-linked benefit will instead by subject to a fully-consulted review by social security Minister Sir Stephen Timms, due to be completed in autumn 2026. Committee chair Debbie Abrahams said: 'We welcome the concessions that the government made to the UC and PIP Bill (now the UC Bill); but there are still issues with these welfare reforms not least with the cut in financial support that newly sick and disabled people will receive. 'The government's own analysis published in March indicates that from next April approximately 50,000 people who develop a health condition or become disabled – and those who live with them - will enter poverty by 2030 as a result of the reduction in support of the UC health premium. 'We agree in a reformed and sustainable welfare system, but we must ensure that the wellbeing of those who come into contact with it is protected. The lesson learned from last month should be that the impact of policy changes to health-related benefits must be assessed prior to policy changes being implemented to avoid potential risks to claimants.' A government spokesperson said: 'Our welfare reforms will support those who can work into jobs and ensure there is always a safety net for those that need it. The impact assessment shows our reforms will lift 50,000 children out of poverty – and our additional employment support will lift even more families out of poverty. 'The reforms will rebalance Universal Credit rates to reduce the perverse incentives that trap people out of work, alongside genuinely helping disabled people and those with long-term health conditions into good, secure work – backed by £3.8bn in employment support over this parliament. 'We are also tackling poverty by extending free school meals to all households on Universal Credit, helping to address holiday hunger with our Crisis and Resilience Fund, supporting over a million households by introducing a Fair Repayment Rate on Universal Credit deductions, and delivering the biggest increase in social and affordable housebuilding in a generation, as part of our Plan for Change.'
The Guardian
18 hours ago
- Business
- The Guardian
Tens of thousands at risk of poverty despite Labour's benefit U-turn, MPs warn
About 50,000 people who become disabled or chronically ill will be pushed into poverty by the end of the decade because of cuts to incapacity benefit, despite ministers dropping the bulk of its welfare reform plans, MPs have warned. The work and pensions select committee report welcomed ministers' decision earlier this month to drop some of the most controversial aspects of its disability reforms in the face of a parliamentary revolt by over 100 Labour backbenchers. These included the wholesale scrapping of proposed major changes to personal independence payment (Pip) eligibility that would have seen around 800,000 people no longer qualifying for the benefit by the end of the decade. The government also ditched plans to freeze the value of the incapacity element of universal credit for existing claimants, affecting over 2m people by 2029-30, though it kept in place proposals to half the weekly rate for new claimants. Labour had 'in the end' made the right decision, the committee said in a report. But it reiterated calls for the remaining planned cuts to universal credit to be delayed until their impact on poverty, health and jobs were fully understood. Ministers been left badly bruised by the enforced gutting of its bill, which was intended to save £5bn a year by the end of the decade. Keir Starmer, the prime minister, admitted subsequently that No 10 'didn't get the process right'. Although all existing universal credit claimants and new claimants with severe or terminal conditions will now be protected, from next year other claimants with limited health capacity for work will see monthly awards cut from £423.27 to £217.26. The committee chair, Labour's Debbie Abrahams, said, 'We welcome the concessions that the government made to the niversal Credit bill; but there are still issues with these welfare reforms not least with the cut in financial support that newly sick and disabled people will receive.' Abrahams said that on the government's own analysis approximately 50,000 people who claim universal credit from next April after developing a health condition or becoming disabled will be plunged into poverty by 2030 as a result of cuts. 'We recommend delaying the cuts to the universal credit health premium, especially given that other policies that such as additional NHS capacity, or employment support, or changes in the labour market to support people to stay in work, have yet to materialise,' she said. 'We agree in a reformed and sustainable welfare system, but we must ensure that the wellbeing of those who come into contact with it is protected. The lesson learned from last month should be that the impact of policy changes to health-related benefits must be assessed prior to policy changes being implemented to avoid potential risks to claimants,' added Abrahams The report also urged ministers to drop plans – currently out for consultation – to prevent young people aged 18-22 from claiming incapacity benefit. 'We share the minister's concern about young people being trapped in economic inactivity before their working lives have even begun, but we do not see why this means they should lose entitlement to universal credit health,' the report said. The cross-party committee welcomed the government's plans to review the much-criticised Pip assessment process, which it said was in 'desperate need of reform.' It applauded ministers promise to 'co-produce' the review with disabled people. A government spokesperson said: 'Our welfare reforms will support those who can work into jobs and ensure there is always a safety net for those that need it. The impact assessment shows our reforms will lift 50,000 children out of poverty – and our additional employment support will lift even more families out of poverty. 'The reforms will rebalance Universal Credit rates to reduce the perverse incentives that trap people out of work, alongside genuinely helping disabled people and those with long-term health conditions into good, secure work – backed by £3.8bn in employment support over this parliament.'
Telegraph
20 hours ago
- Business
- Telegraph
Liz Kendall faces fresh benefits backlash
Liz Kendall is facing backlash over her planned benefit cuts after MPs warned that slashing universal credit (UC) payments would push more disabled people into poverty. On Tuesday, the influential Work and Pension Committee said it was alarmed by Ms Kendall's proposed changes to UC, which will see top-up payments to new claimants who are disabled halved from £423.27 to £217.26 a month from 2026. The committee, chaired by Labour MP Debbie Abrahams, warned that slashing the benefits risked forcing more disabled people into poverty. The reforms risk reducing payments for people with severe mental health conditions, the committee said, because their condition may not qualify for a full UC payment. Ms Abrahams said that the Government's own analysis showed that the reduction in the UC health top-up payment would push approximately 50,000 people into poverty by the end of the decade. However, Helen Whately, shadow work and pensions secretary, said: 'Politicians should be trying to get welfare spending under control, not handing out even more cash. It's a sobering fact that the British Government spends more on sickness benefits than on defence – this cannot be allowed to continue.' UC is Britain's main benefit and it replaced a myriad of other payments, such as jobseekers' allowance, child tax credits and housing benefits in 2012. Claimants who are disabled can claim a top-up payment in addition to standard UC, but the Government is hoping to change this amid fears too many people are claiming it on spurious grounds. Welfare battle Ms Kendall had been battling rebels from her own party to push through a watered-down version of her welfare reforms. Following a government policy reversal and a series of major concessions to Labour rebels, it eventually passed at the start of the month. As part of her reforms, Ms Kendall, who is the Work and Pensions Secretary, has sought to address Britain's ballooning welfare spending, which is estimated to reach £378bn by 2029-30 – almost double the £210bn paid out to claimants in 2013-14. Yet concessions made to the bill are expected to wipe out a third of the £5bn they had been expected to save taxpayers, piling further pressure on the Treasury. Ms Kendall warned earlier this month that once workers start receiving the health element of UC, only 3pc a year manage to get off the benefit again. Despite this, Ms Abrahams said: 'There are still issues with these welfare reforms, not least with the cut in financial support that newly sick and disabled people will receive.' Ms Abrahams has been a staunch critic of the Government's welfare reforms bill alongside other Labour rebels, including Meg Hillier and Rachael Maskell, who had pushed for changes to the bill. The fallout over the bill is far from over, as Ms Abrahams told Sir Kier Starmer at the Liaison Committee that the 'fear and anxiety' felt by disabled people following the Government's welfare reform bill 'cannot be underestimated'. In a tense exchange between the Left-wing MP and the Prime Minister last week, Ms Abrahams said the reforms were 'far removed from Labour values' and warned that the Government 'must do better'. A recent report from the Office for Budget Responsibility warned that the UK's national debt is on track to spiral from just under 100pc of GDP to 270pc in the next 50 years if nothing is done to reduce the benefits bill. A government spokesman said: 'Our welfare reforms will support those who can work into jobs and ensure there is always a safety net for those that need it. The impact assessment shows our reforms will lift 50,000 children out of poverty – and our additional employment support will lift even more families out of poverty. 'The reforms will rebalance universal credit rates to reduce the perverse incentives that trap people out of work, alongside genuinely helping disabled people and those with long-term health conditions into good, secure work – backed by £3.8bn in employment support over this parliament.'
The Guardian
20 hours ago
- Business
- The Guardian
Tens of thousands at risk of poverty despite Labour's benefit U-turn, MPs warn
About 50,000 people who become disabled or chronically ill will be pushed into poverty by the end of the decade because of cuts to incapacity benefit, despite ministers dropping the bulk of its welfare reform plans, MPs have warned. The work and pensions select committee report welcomed ministers' decision earlier this month to drop some of the most controversial aspects of its disability reforms in the face of a parliamentary revolt by over 100 Labour backbenchers. These included the wholesale scrapping of proposed major changes to personal independence payment (Pip) eligibility that would have seen around 800,000 people no longer qualifying for the benefit by the end of the decade. The government also ditched plans to freeze the value of the incapacity element of universal credit for existing claimants, affecting over 2m people by 2029-30, though it kept in place proposals to half the weekly rate for new claimants. Labour had 'in the end' made the right decision, the committee said in a report. But it reiterated calls for the remaining planned cuts to universal credit to be delayed until their impact on poverty, health and jobs were fully understood. Ministers been left badly bruised by the enforced gutting of its bill, which was intended to save £5bn a year by the end of the decade. Keir Starmer, the prime minister, admitted subsequently that No 10 'didn't get the process right'. Although all existing universal credit claimants and new claimants with severe or terminal conditions will now be protected, from next year other claimants with limited health capacity for work will see monthly awards cut from £423.27 to £217.26. The committee chair, Labour's Debbie Abrahams, said, 'We welcome the concessions that the government made to the niversal Credit bill; but there are still issues with these welfare reforms not least with the cut in financial support that newly sick and disabled people will receive.' Abrahams said that on the government's own analysis approximately 50,000 people who claim universal credit from next April after developing a health condition or becoming disabled will be plunged into poverty by 2030 as a result of cuts. 'We recommend delaying the cuts to the universal credit health premium, especially given that other policies that such as additional NHS capacity, or employment support, or changes in the labour market to support people to stay in work, have yet to materialise,' she said. 'We agree in a reformed and sustainable welfare system, but we must ensure that the wellbeing of those who come into contact with it is protected. The lesson learned from last month should be that the impact of policy changes to health-related benefits must be assessed prior to policy changes being implemented to avoid potential risks to claimants,' added Abrahams The report also urged ministers to drop plans – currently out for consultation – to prevent young people aged 18-22 from claiming incapacity benefit. 'We share the minister's concern about young people being trapped in economic inactivity before their working lives have even begun, but we do not see why this means they should lose entitlement to universal credit health,' the report said. The cross-party committee welcomed the government's plans to review the much-criticised Pip assessment process, which it said was in 'desperate need of reform.' It applauded ministers promise to 'co-produce' the review with disabled people. A government spokesperson said: 'Our welfare reforms will support those who can work into jobs and ensure there is always a safety net for those that need it. The impact assessment shows our reforms will lift 50,000 children out of poverty – and our additional employment support will lift even more families out of poverty. 'The reforms will rebalance Universal Credit rates to reduce the perverse incentives that trap people out of work, alongside genuinely helping disabled people and those with long-term health conditions into good, secure work – backed by £3.8bn in employment support over this parliament.'
Yahoo
a day ago
- Health
- Yahoo
Homelessness charity calls for clearer government strategy to tackle crisis
A homelessness charity has called for greater clarity on the Government's strategy to tackle rising housing insecurity. Alabaré, which supports vulnerable people across the South West and Wales, has warned that more action is needed to prevent homelessness and improve long-term outcomes. The call comes as new figures from the Ministry of Housing, Communities and Local Government reveal that more than 131,000 households were living in temporary accommodation between January and March - a 12 per cent increase on the previous year. Read more People invited to take part in sleepout at Stonehenge for charity Former military leader named as next chairman of homelessness charity Football club to donate bar sales to homelessness charity Alabaré has called for Government action on homelessness. (Image: Alabaré) Andrew Lord, CEO of Alabaré, said: "The rising numbers of people being pushed into poverty and ultimately homelessness are frightening, and we feel it's vital that the government sets out a clear plan, with the support of charities like ours, to turn the corner and make sure those who need the help have access to it." Alabaré provides accommodation and support for people who are homeless or at risk, including veterans, young people and individuals with learning disabilities. The charity also offers emergency and temporary beds for those experiencing mental health crises, along with drop-in services. Mr Lord said: "We'd like to see the Government stick to their commitment of funding for affordable housing and to make sure support services can help people long-term, as well as in times of crisis."
