Latest news with #welfare cuts
The Independent
a day 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.'
Bloomberg
16-07-2025
- Politics
- Bloomberg
Labour Suspends UK MPs Following Welfare Revolt Earlier in July
Labour suspended a number of its members of Parliament for breaking party discipline following a large-scale rebellion over welfare cuts earlier this month. The Times of London and the Guardian on Wednesday said Labour had suspended at least three MPs, while the Financial Times said several were expected to be suspended. Neil Duncan-Jordan and Brian Leishman both confirmed their suspensions. The I named Chris Hinchliff as a third MP suspended, while the Independent said Rachel Maskell, one of the leaders of the welfare revolt, had also been called in to talk to the party's chief whip.
The Independent
15-07-2025
- Business
- The Independent
OBR boss denies forecast drove welfare cut proposals
The Chancellor could have met her fiscal rules without proposing £5 billion worth of welfare cuts, the head of the Office for Budget Responsibility (OBR) has said. Richard Hughes rejected the suggestion that the OBR's forecast was now driving policy, saying it was up to chancellors to decide how much headroom they wanted against their targets. In March 2025, it was reported that Rachel Reeves had expanded planned cuts to welfare shortly before her spring statement after the OBR forecast the Government's previous proposals would not save as much money as thought. That enabled her to maintain the £9.9 billion of headroom against her debt target that she set out in her October 2024 budget. But it also prompted an outcry from Labour backbenchers, leading to the Government dropping most of the proposals in order to avoid its first Commons defeat. Appearing before the Commons Treasury Committee on Tuesday ahead of his proposed reappointment as the OBR's chairman, Mr Hughes denied that changes in the OBR forecast had driven the proposed welfare changes. He said: 'I don't really accept the characterisation that it was changes in our forecast that forced the Government to make any particular sort of policy decision. 'Back in March, the Government decided to make £5 billion worth of welfare savings. They had £10 billion worth of headroom against their fiscal rule. They could have settled for five.' Mr Hughes went on to characterise the decision on welfare, which has now been largely reversed, as 'an entirely political choice' and added Ms Reeves could also have decided to break or change her fiscal rules. Asked about a perception that the forecast was now driving policy, he said: 'Chancellors can make a point about how much headroom they want against their fiscal rules. Recently they have left themselves very little.' Mr Hughes also pushed back against criticism from the Prime Minister, who had complained to the Commons Liaison Committee in April that the OBR's forecast had not included the effect of the Government's welfare reforms on employment. He said the Government had failed to provide enough detail on the employment support programme for it to be included, saying: 'There were no specifics. 'They couldn't tell us who was going to benefit from this programme, which groups, what kind of support they were going to get. 'There was no policy for us to score in our forecast.' A series of U-turns on the Government's welfare proposals at the start of July have left the Chancellor looking for another £5 billion in savings or tax rises if she wishes to maintain the headroom against her debt target she had last year. Ms Reeves is also likely to face a further squeeze thanks to a weakening economy and a commitment to partially reverse cuts to the winter fuel allowance.
