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The Independent
09-07-2025
- Business
- The Independent
Welfare reforms risk leaving stain on Labour, MP warns
A Labour MP who led a rebellion against the Government's benefits plan has labelled it an 'omnishambles', which she warned could leave disabled people worse off. Rachael Maskell said pressing ahead with the welfare reform Bill risked leaving 'such a stain' on her party, as she urged ministers to scrap a proposed change to the out-of-work element of universal credit. Ministers have proposed increasing the universal credit standard allowance at least in line with inflation until 2029/30. But the Government has proposed freezing the 'limited capability for work' (LCW) part of the benefit until 2030, and new claimants who sign up for the 'limited capability for work and work-related activity' payment will receive a lower rate than existing claimants after April 2026, unless they meet a set of severe conditions criteria or are terminally ill. Commons Work and Pensions Committee chairwoman Debbie Abrahams urged the Government to push back its reforms until November 2026. 'This is to allow for the NHS capacity to ramp up and to ensure funding follows health need, so that people with newly required conditions or impairments can receive early treatment and a better aligned labour market that will enable them to return to work quickly,' the Labour MP for Oldham East and Saddleworth told the Commons. 'Without this, there is the risk that 45,000 more newly disabled people and their children will be pushed into poverty.' Ms Abrahams described her pitch as a 'reasonable compromise', costing £141 million in lost savings. Ms Maskell tried to block the Bill's progression at second reading last week using a reasoned amendment, which failed by 149 votes to 328, majority 179. Around 90 minutes before that vote, social security minister Sir Stephen Timms promised in an intervention to halt a proposed reform to the separate personal independence payment (Pip) benefit, with any changes now only coming in after a review. 'The cart before the horse, the vote before the review, and this omnishambles of a Bill, these people with fluctuating conditions not knowing where they stand, and for that, nor where any of us stand by the end of today,' Ms Maskell said on Wednesday. The York Central MP had earlier said: 'No matter what spin, to pass the Bill tonight, this will leave such a stain on our great party, founded on values of equality and justice.' She urged MPs to gut the Bill of plans to roll out a lower rate of out-of-work benefit for new claimants from 2026 and freeze the LCW component. 'Their contention is my contention – sick and disabled people have not been consulted,' Ms Maskell added. She has proposed that current out-of-work benefits claimants should not be put on the proposed lower rate of out-of-work benefit, if they slip out of and then back into the eligibility criteria either side of the changes. 'If someone has a fluctuating physical or mental health condition like multiple sclerosis, schizophrenia, cystic fibrosis, or other recurring muscular-skeletal condition, if following a period of remission and work then relapse and returning to universal credit, unless unequivocally stated, they will return onto the pittance of £50-a-week for their health element,' she said. Sir Stephen intervened and asked her to acknowledge 'how the Bill protects people in exactly the situation that she describes', where claimants are prone to seasonal conditions such as chest infections over the winter. If a pre-2026 claimant slips out of being eligible for universal credit but meets the eligibility criteria again within six months, the Bill would demand that they be considered 'continuously entitled to an award'. It would mean that they could go 'straight back onto the position they are in at the start', the minister added. Labour MP for Penistone and Stocksbridge Marie Tidball urged the Government to properly work with disabled people in the Pip review, known as the Timms review. Ms Tidball, a disabled MP who tabled a cross-party amendment on the Timms review, said: 'While the minister will head up this review, the voices of disabled people must be front and centre. 'The measures in this new clause emphasise the need for disabled people and disabled people's organisations to make up the majority of the taskforce, and to have a significant role in the leadership of the review, and I believe carers could be a part of that.' She said any recommendations must be debated in the Commons before implementation. She said: 'Output of this review must also be meaningful and not performative.' Independent MP Zarah Sultana, who quit Labour last week, spoke in the Commons for the first time since her decision, where she hit out at the Government. The MP for Coventry South MP said: 'The truth is this – Westminster is broken but the real crisis is deeper. This is a Government, not out of touch, but also morally bankrupt. It works for billionaires and big business while turning its back on disabled people.'
Yahoo
09-07-2025
- Business
- Yahoo
Welfare reforms risk leaving stain on Labour, MP warns
A Labour MP who led a rebellion against the Government's benefits plan has labelled it an 'omnishambles', which she warned could leave disabled people worse off. Rachael Maskell said pressing ahead with the welfare reform Bill risked leaving 'such a stain' on her party, as she urged ministers to scrap a proposed change to the out-of-work element of universal credit. Ministers have proposed increasing the universal credit standard allowance at least in line with inflation until 2029/30. But the Government has proposed freezing the 'limited capability for work' (LCW) part of the benefit until 2030, and new claimants who sign up for the 'limited capability for work and work-related activity' payment will receive a lower rate than existing claimants after April 2026, unless they meet a set of severe conditions criteria or are terminally ill. Commons Work and Pensions Committee chairwoman Debbie Abrahams urged the Government to push back its reforms until November 2026. 'This is to allow for the NHS capacity to ramp up and to ensure funding follows health need, so that people with newly required conditions or impairments can receive early treatment and a better aligned labour market that will enable them to return to work quickly,' the Labour MP for Oldham East and Saddleworth told the Commons. 'Without this, there is the risk that 45,000 more newly disabled people and their children will be pushed into poverty.' Ms Abrahams described her pitch as a 'reasonable compromise', costing £141 million in lost savings. Ms Maskell tried to block the Bill's progression at second reading last week using a reasoned amendment, which failed by 149 votes to 328, majority 179. Around 90 minutes before that vote, social security minister Sir Stephen Timms promised in an intervention to halt a proposed reform to the separate personal independence payment (Pip) benefit, with any changes now only coming in after a review. 'The cart before the horse, the vote before the review, and this omnishambles of a Bill, these people with fluctuating conditions not knowing where they stand, and for that, nor where any of us stand by the end of today,' Ms Maskell said on Wednesday. The York Central MP had earlier said: 'No matter what spin, to pass the Bill tonight, this will leave such a stain on our great party, founded on values of equality and justice.' She urged MPs to gut the Bill of plans to roll out a lower rate of out-of-work benefit for new claimants from 2026 and freeze the LCW component. 'Their contention is my contention – sick and disabled people have not been consulted,' Ms Maskell added. I voted against the UC&PIP Bill. It's now due back for next stage in Parliament. My next Amendment 👇would safeguard those with fluctuating conditions, or a recurrence of a condition from being placed onto a lower rate of universal credit#York #UC #PIP — 💙Rachael Maskell MP (@RachaelMaskell) July 9, 2025 She has proposed that current out-of-work benefits claimants should not be put on the proposed lower rate of out-of-work benefit, if they slip out of and then back into the eligibility criteria either side of the changes. 'If someone has a fluctuating physical or mental health condition like multiple sclerosis, schizophrenia, cystic fibrosis, or other recurring muscular-skeletal condition, if following a period of remission and work then relapse and returning to universal credit, unless unequivocally stated, they will return onto the pittance of £50-a-week for their health element,' she said. Sir Stephen intervened and asked her to acknowledge 'how the Bill protects people in exactly the situation that she describes', where claimants are prone to seasonal conditions such as chest infections over the winter. If a pre-2026 claimant slips out of being eligible for universal credit but meets the eligibility criteria again within six months, the Bill would demand that they have been 'continuously entitled to an award'. It would mean that they could go 'straight back onto the position they are in at the start', the minister added. Green Party MP for Brighton Pavilion Sian Berry has proposed increasing the standard allowance beyond inflation by 4.8% from April 2026. Currently, the Bill would set the uplift at 2.3% in 2026/27, rising to 4.8% by 2029/30. Ms Berry said this could be paid through a wealth tax, and added her change would go 'some way' to set universal credit according to 'an objective assessment of what people need'.
The Independent
03-07-2025
- Business
- The Independent
Starmer vows to press on with welfare reform as he takes blame for U-turn
Sir Keir Starmer has insisted welfare reform is still on the table as he took the blame for Tuesday's U-turn in the face of a major backbench rebellion. In an interview with the BBC, the Prime Minister acknowledged his Government did not 'get the process right' and failed to 'engage in the way that we should have done' on welfare changes. But he added his Government would 'come through it stronger' as he vowed to 'reflect' on what needed to be done 'to ensure we don't get into a situation like that again'. Despite the setback, which saw changes to the personal independence payment (Pip) stripped out of his welfare legislation, Sir Keir said on Thursday his Government was 'pressing on with welfare reform'. Answering questions at the launch of Labour's NHS plan, he said: 'It is important we reform the system. Welfare isn't working.' The Prime Minister went on to praise disabilities minister Sir Stephen Timms, who is now leading a review of Pip, saying he was 'a thoroughly decent man of huge integrity that we can have faith in to do the review and make the changes that are necessary'. Sir Keir's U-turn saw planned changes to Pip eligibility put off until after Sir Stephen has completed his review of the benefit next autumn, leaving only changes to universal credit to go forward. That decision has caused a fiscal headache for Chancellor Rachel Reeves, with the £4.8 billion of savings the reforms were expected to deliver now unlikely to materialise. Economists have warned that this is likely to mean further tax rises in the autumn, and the Prime Minister did not rule out the possibility on Thursday. Ms Reeves has previously promised she would not need to repeat the £40 billion tax raid she set out in October 2024. Asked if he would repeat that commitment, Sir Keir said: 'No prime minister or chancellor is going to write a budget in advance, but we did really tough stuff in that budget last year.' But he added that last year's budget had already done much of the 'heavy lifting' on repairing the public finances. The Chancellor also declined to 'speculate' about tax rises ahead of the budget, but told broadcasters there was 'a cost to the welfare changes that Parliament voted through this week and that will be reflected in the budget'. Ms Reeves herself appeared alongside Sir Keir and Health Secretary Wes Streeting at the launch of the NHS plan on Thursday, a day after she had appeared visibly tearful in the Commons during Prime Minister's Questions. The Chancellor told broadcasters it had been related to a 'personal issue', while Sir Keir gave her his full backing, adding: 'I think it's just fantastic she's here and, as I say, none of this would be happening if she hadn't taken the decisions that she's taken.' Questions about the Chancellor's future had sparked a sharp fall in the value of UK government bonds on Wednesday, but the markets rallied on Thursday morning following repeated reassurances she was safe in Number 11. But Conservative shadow chancellor Sir Mel Stride said the scenes in the Commons over the past week had left bond markets 'twitchy' about the Government and 'their ability to actually grip things like spending going forward'.
Yahoo
02-07-2025
- Business
- Yahoo
Welfare reform bill: what changes did the government make to get it over the line?
The government's landmark bill on welfare reform passed by 335 to 260 votes on Tuesday evening, after staving off a major rebellion from Labour MPs. To win over backbench MPs who had opposed the bill, the government made a series of concessions, including a last-minute compromise agreeing that any changes to personal independence payment (Pip) will not be introduced until the outcome of a review. In March, the government introduced the universal credit and personal independence bill. The aim was to create a sustainable welfare system in response to changing demographics and population health. In recent years, the UK has seen an increase in people claiming benefits for long-term health conditions, with one in ten people of working age claiming a sickness or disability benefit. Welfare expenditure has increased, and is projected to be £70 billion a year by the end of the parliament. Recalibrating the welfare system is not an easy task. The government has said reform is needed to support those with highest needs and assist more people into work. However, critics of the bill, raised concerns that it would result in an overly restrictive disability benefits system and push more people into poverty. Here's what's the bill initially proposed and what was changed ahead of the vote. Get your news from actual experts, straight to your inbox. Sign up to our daily newsletter to receive all The Conversation UK's latest coverage of news and research, from politics and business to the arts and sciences. The bill initially proposed significant changes to personal independence payments (Pip) from November 2026. Pip is a working-age benefit to help people with the costs associated with a long-term health condition or disability. It has two elements, a daily living component and a mobility component. A points-based system is used to assess eligibility for Pip. Currently, to qualify for the daily living component a claimant must have limited ability in relation to a range of ten activities. These include washing and bathing, dressing and undressing, eating and drinking and managing medication or therapy. Eight to 11 points leads to qualification for the standard rate and over 12 points for the enhanced rate. On the current system, a claimant can score one or two points across a range of activities, it doesn't matter how the points are made up. In March, the government announced that from November 2026, claimants will need to score at least four points on at least one of the ten activities to qualify. The amount of points available ranges from zero to 12, depending on the activity. Critics argued that this places the bar at too high a level, making it more difficult for people whose health problems are spread across a range of activities, rather than meeting the criteria in one. Concerns were raised that this change could disproportionately affect people with mental health problems. Research shows that previous changes to Pip have caused uncertainty and anxiety for many people with mental health problems. Typically if the help required relates to being reminded or encouraged to compete a task, only two points are awarded. This can be a common way for people with mental health problems to qualify for Pip, including those with severe conditions such as bipolar disorder. It is estimated that between 800,000 and 1.2 million people would have lost entitlement to Pip under the four-point proposal. After it became clear that dozens of Labour MPs planned to vote against the bill, the work and pensions secretary, Liz Kendall, announced a concession on the Pip proposals. First, that four-point rule should only apply to new claimants, with people already in receipt of Pip remaining within the current rules. Second, there will be a review of the Pip assessment led by Stephen Timms, the minister for social security and disability, alongside people with disabilities and representative organisations. But for some MPs and campaigners, this raised the spectre of a two-tier system which protects existing claimants but not future ones. Two hours before the Commons vote, Timms announced that no changes would be made to Pip eligibility before the review. The bill passed without any changes to Pip. Read more: What remains in the bill are changes to universal credit, the UK's main means-tested benefit, primarily for claimants who are unfit for work. Over 3 million claimants (out of a total of over 7 million) are not required to look for work as a result of a health condition. They receive an additional health-related payment of more than £400 per month. The bill reduces the health element for new claims from £97 to £50 per week from April 2026 and restricts payment to claimants over the age of 22. Under original proposals, the higher health-related rate was to be frozen for existing claimants. This will now be increased every year for the rest of the parliament, at least in line with inflation. A £1 billion back-to-work support package, originally scheduled to be introduced in 2029, will be accelerated. The Department for Work and Pensions estimates that 730,000 future universal credit claimants will lose an average of £3000 per year compared to current claimants. The government's original plans were estimated to save £5 billion a year by 2030. Last weeks' concessions would cost £3 billion. The last-minute compromises mean that there will be virtually no medium-term savings. Labour minister Pat McFadden has ruled out raising income tax, VAT or national insurance, but questions remain on how these concessions will be paid for. The government technically won the vote on welfare reform, but was unable to push through its most significant reforms. The debate over the future of the welfare system will continue (and probably intensify) as the Timms review begins. This article is republished from The Conversation under a Creative Commons license. Read the original article. Richard Machin is a member of the Labour party and a board member of Church Action on Poverty.
BBC News
02-07-2025
- Business
- BBC News
BBC Verify Live: Cost of benefits U-turn, and new Gaza evacuation order
Update: Date: 10:32 BST Title: Could the welfare reform plan end up costing the government money? Content: Tom EdgingtonBBC Verify senior journalist Economists have suggested the government's latest concession on its welfare reforms - notably that proposed changes to personal independence payments (Pip) will be delayed - will now result in no 'net savings' by 2030. Paul Johnson, director of the Institute of Fiscal Studies (IFS), says, external the reforms 'could even end up costing a few tens of millions'. How is this possible? Under the government's original plans, the reform package was expected to save around £5bn a year by 2030. This projected figure has been whittled down after a series of concessions to Labour MPs. The tightening of Pip rules was expected to save £2.6bn by 2030, according to the IFS's Tom Waters. But this change is now subject to a government review - which means ministers are left with just a projected £1.7bn saving from cutting the health element of universal credit. However, the government has also promised to raise basic universal credit, at a cost of £1.8bn, Waters adds. This potentially leaves the government with a bill of £100m in 2029-30. Update: Date: 10:06 BST Title: IDF issues new evacuation order for Khan Younis Content: Joshua Cheetham and Paul BrownBBC Verify The Israeli military has issued evacuation orders for three areas of Khan Younis, southern Gaza, with people there being told to go 'immediately northwards to the known shelters in Deir al-Balah'. The Israel Defense Forces has not provided any immediate details about these shelters. Two of these areas in Khan Younis have appeared in previous evacuation orders, while a third is new. There have been reports of an overnight raid in the Zeitoun neighbourhood of Gaza City, which we're investigating. The Israel Defense Forces' Arabic spokesman posted this map identifying the latest evacuation zones in Khan Younis Update: Date: 09:53 BST Title: What's the impact of the welfare U-turn on the government's finances? Content: Tom EdgingtonBBC Verify senior journalist The government's last-minute concession yesterday over its plan to change the personal independence payment disability benefit leaves it facing questions about the impact of this - and other welfare reform concessions - on the public finances. The government's original welfare plan was expected to save about £5bn a year from 2030. That estimate was halved when it announced initial concessions last week in an attempt to stave off a growing rebellion by Labour MPs. Having now made further concessions, economists say the government could end up with no "net savings" by 2030. This is significant because the government has a rule which says it cannot borrow money to fund day-to-day spending - to effectively balance the books. And the amount of leeway Chancellor Rachel Reeves had initially budgeted for against her borrowing rule was just £9.9bn by 2030. Helen Miller, deputy director of the Institute for Fiscal Studies, said the welfare concessions have effectively halved the chancellor's "margin of error" against her main fiscal rule - raising the possibility of tax rises in the autumn. Update: Date: 09:42 BST Title: Wednesday on BBC Verify Live Content: Rob CorpBBC Verify Live editor Good morning. On the live page today we're going to be sharing BBC Verify's work on a range of stories - taking in the impact on the UK's public finances of the government's last-minute changes to its welfare reform plans in the face of a significant potential rebellion by its own MPs. Elsewhere, we're keeping a close eye on what's happening in Gaza. The Israeli military has warned residents in parts of Khan Younis to 'head north' - we'll assess which areas are affected. And with renewed talk of a ceasefire in the long-running war between Israel and Hamas we'll share what we know about the hostages still being held in Gaza and any strikes that happen in the meantime. As well as those we'll be across Prime Minister's Questions in the House of Commons from noon ready to fact-check any claims made by MPs during the session. We start today with our first look at the consequences of yesterday's welfare U-turn.
