Latest news with #welfareReforms
The Independent
6 days ago
- Business
- The Independent
Welfare reforms will lead to rise in homelessness, charities warn Government
Going ahead with welfare reforms will drive more people into homelessness, a number of major charities have warned the Government. Shelter and Crisis are among the signatories to a letter to the Work and Pensions Secretary Liz Kendall, voicing concerns over the risks from her proposed changes to the benefits system. The Government is already under pressure over the controversial reforms, with more than 40 Labour MPs earlier this month urging the Prime Minister to pause and reassess planned cuts, saying the proposals are 'impossible to support'. The proposed reforms, set out earlier this year, would tighten the eligibility criteria for personal independence payment (Pip) – the main disability benefit in England – and see the sickness-related element of universal credit (UC) cut. They also proposed delaying access to the health element of UC to those aged 22 and over, with the aim of reinvesting savings to support young people into work or training. The package of measures is aimed at reducing the number of working-age people on sickness benefits, and the Government hopes they can save £5 billion a year by the end of the decade. But an impact assessment published alongside the reforms warned some 250,000 people – including 50,000 children – could fall into relative poverty as a result of the changes. Now a letter, co-ordinated by the St Mungo's homelessness charity, has stated the 'deep concern' organisations within the sector feel about the reforms. In the letter, which has also been sent to Deputy Prime Minister and Housing Secretary Angela Rayner, they said: 'We can only conclude that the proposed changes will increase the number of people at risk of becoming homeless for the first time, increase the number of people we have helped resolve their homelessness fall back into it and increase the length of time it takes to resolve people's homelessness in the future.' They stated that while they share the Government's 'ambition to establish a thriving and inclusive labour market and give people the opportunities and support they need to get back to work', the reforms 'will not help achieve your ambition and therefore we as a sector cannot support them'. The letter stated that the reforms will 'push people further away from the labour market, increase homelessness and put excessive pressure on statutory services'. They said increases in already record levels of homelessness 'will have a catastrophic impact on mental and physical health, education and employment opportunities' and have a 'domino effect of imposing a significant financial cost to the state' in paying for more temporary accommodation and emergency homelessness services. The latest official Government statistics, published in April, showed new record highs in both households and children living in temporary accommodation – a form of homelessness. There were 127,890 households in this situation as of the end of December, while the total number of children in temporary accommodation stood at 165,510. The charities added: 'Homelessness devastates people's chances of employment. These cuts and eligibility restrictions will not give people a pathway to work and we urge the Government to reconsider its position.' It was reported earlier this week that benefit claimants could be given longer 'transitional periods' to seek out other benefits if they lose out as a result of the reforms, in what has been seen by some as an effort by Sir Keir Starmer to soften the blow of the cuts amid the growing threat of a backbench rebellion. Emma Haddad, chief executive of St Mungo's, said: 'Many people rely on these benefits to manage complex health conditions as part of their recovery from homelessness and pay for essential utilities. With already eyewatering rents, these benefits help people cover their additional costs. 'Without them, we fear people will be increasingly unable to afford to secure somewhere safe to live. 'Homelessness has already pushed these people to the edge. We should be supporting them to rebuild their lives, not creating more challenges for them to overcome.' A Government spokesperson said: 'We will never compromise on protecting people who need our support, and our reforms will mean the social security system will always be there for those who will never be able to work. 'At the heart of the government's reforms is a £1 billion scheme to help the long-term sick or disabled out of poverty and into good, secure jobs. 'We have also raised the national living wage, increased benefits and given additional help to the poorest households, as part of our Plan for Change.'
Yahoo
20-05-2025
- Business
- Yahoo
Starmer's welfare overhaul could help just 60,000 into work
Sir Keir Starmer's welfare reforms could push just 60,000 people back to work, according to a leading think tank. The Resolution Foundation said proposals to cut the welfare bill by £4.8bn would push between 38,000 and 57,000 people back to work, while £1.9bn in employment support could result in just 23,000 extra people finding a job. 'Under a best-case scenario 105,000 more people would be in work by the end of parliament,' the think tank said in a report. The foundation also said the number of people finding a job would be 'dwarfed' by the quarter of a million pushed into poverty and 700,000 families falling further below the poverty line, according to the Government's own analysis. It also warned that the cuts would hit many older people who were less likely to be able to start work. The foundation noted that around 55pc of claimants of the personal independence payment (PIP), Britain's main disability benefit, were aged over 50. This group was among the least likely to go back to work even if their welfare payments are reduced, the think tank said. It also noted that the 'phased nature' of benefit reforms suggested savings would build over many years, with the bulk coming well into the next decade. Official figures show spending on health and disability benefits is on course to rise to almost £100bn a year by 2030, driven by claims from working-age adults. However, the Prime Minister is facing the biggest rebellion of his premiership over proposals to reduce the working-age benefits bill by £4.8bn by the end of the decade. The think tank's figures will hand more ammunition to up to 170 Labour MPs who are planning to oppose the cuts or abstain in a planned vote next month. Rachael Maskell, a Labour MP who will be voting against the reforms, said the cuts would hurt working people and pile more pressure on public services. She said: 'Twenty per cent of PIP recipients are currently in work and many rely on PIP to maintain their independence, so cutting this lifeline will come at huge expense as people will lose their ability to function and become more dependent on public services, while the costs of poverty and worsening health are well understood.' Jon Trickett, another Labour rebel, suggested he was prepared to lose the party whip over the issue. 'It's quite disturbing that the Government projects such a large increase in the number of people in poverty as a result of changes which they themselves are introducing,' he said. 'I spent all of my political life fighting on behalf of working people – and especially people living difficult lives as a result of poverty. So I will continue to take that stand whatever the consequences.' Greg Thwaites, at the Resolution Foundation, urged the Government to bring forward employment support 'so that more people are helped into work at the point at which they lose benefit income, rather than years later'. Currently £1bn of the £1.9bn spending on employment support this parliament will not begin until the end of the decade. The think tank also called for PIP recipients who fail the new, tougher assessments to be given six months' notice before any cuts to their benefits take effect. 'This would prevent disabled people being hit by sharp, immediate income losses, and offer them more time to find work if they can,' it said. PIP is paid regardless of whether someone works. The Government has been contacted for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
20-05-2025
- Business
- Telegraph
Starmer's welfare overhaul could help just 60,000 into work
Sir Keir Starmer's welfare reforms could push just 60,000 people back to work, according to a leading think tank. The Resolution Foundation said proposals to cut the welfare bill by £4.8bn would push between 38,000 and 57,000 people back to work, while £1.9bn in employment support could result in just 23,000 extra people finding a job. 'Under a best-case scenario 105,000 more people would be in work by the end of parliament,' the think tank said in a report. The foundation also said the number of people finding a job would be 'dwarfed' by the quarter of a million pushed into poverty and 700,000 families falling further below the poverty line, according to the Government's own analysis. It also warned that the cuts would hit many older people who were less likely to be able to start work. The foundation noted that around 55pc of claimants of the personal independence payment (PIP), Britain's main disability benefit, were aged over 50. This group was among the least likely to go back to work even if their welfare payments are reduced, the think tank said. It also noted that the 'phased nature' of benefit reforms suggested savings would build over many years, with the bulk coming well into the next decade. Official figures show spending on health and disability benefits is on course to rise to almost £100bn a year by 2030, driven by claims from working-age adults. However, the Prime Minister is facing the biggest rebellion of his premiership over proposals to reduce the working-age benefits bill by £4.8bn by the end of the decade. The think tank's figures will hand more ammunition to up to 170 Labour MPs who are planning to oppose the cuts or abstain in a planned vote next month. Rachael Maskell, a Labour MP who will be voting against the reforms, said the cuts would hurt working people and pile more pressure on public services. She said: 'Twenty per cent of PIP recipients are currently in work and many rely on PIP to maintain their independence, so cutting this lifeline will come at huge expense as people will lose their ability to function and become more dependent on public services, while the costs of poverty and worsening health are well understood.' Jon Trickett, another Labour rebel, suggested he was prepared to lose the party whip over the issue. 'It's quite disturbing that the Government projects such a large increase in the number of people in poverty as a result of changes which they themselves are introducing,' he said. 'I spent all of my political life fighting on behalf of working people – and especially people living difficult lives as a result of poverty. So I will continue to take that stand whatever the consequences.' Greg Thwaites, at the Resolution Foundation, urged the Government to bring forward employment support 'so that more people are helped into work at the point at which they lose benefit income, rather than years later'. Currently £1bn of the £1.9bn spending on employment support this parliament will not begin until the end of the decade. The think tank also called for PIP recipients who fail the new, tougher assessments to be given six months' notice before any cuts to their benefits take effect. 'This would prevent disabled people being hit by sharp, immediate income losses, and offer them more time to find work if they can,' it said. PIP is paid regardless of whether someone works. A government spokesman said: 'This report gives only a partial picture and fails to reflect the true scale of this Government's reforms to get people out of poverty and into good, secure jobs. 'At the heart of these reforms is a £1bn scheme, which builds on our Get Britain Working White Paper that will overhaul job centres, tackle inactivity and deliver a youth guarantee so every young person is either earning or learning. 'Our Plan for Change also includes Connect to Work and WorkWell programmes that will help sick and disabled people to find a suitable pathway to get into and on at work.'
Telegraph
18-05-2025
- Politics
- Telegraph
Rebellion is in the air. Starmer will struggle to calm it
Labour is not enjoying power. When I recently asked a first-time Labour MP if she and colleagues were planning a party to celebrate July's one-year anniversary of their first election, she replied: 'What is there to celebrate?' Getting hammered in the polls by Nigel Farage while being told to vote for welfare cuts isn't what new MPs were dreaming of when they celebrated their landslide win last year. 'This isn't what I came into politics to do' could be the official motto of the welfare rebels. The prospect of more than 100 Labour MPs rebelling over welfare reforms doesn't just matter because of its potential impact on the public finances. It raises questions. Can a gloomy Parliamentary Labour Party stomach the messy business of governing? And Keir Starmer's plan for government in particular? Whereas Conservatives tend to see government as their natural habitat, Labour often finds the experience troubling. When Starmer struck his trade agreement with Donald Trump, the PM's team got more messages of congratulations from Conservatives than from their own side. 'We find the purity of opposition more comfortable than actually doing things,' one Labour MP concedes. Meanwhile the job of being an MP has become even more pressurised. New-intake Labour MPs were chosen by local associations expecting them to be local champions, responsive to every local whim. Slaves to their inboxes, some MPs report getting hundreds of emails a day – and feel obliged to answer them all, for fear of grievances aired on social media. Add in antisocial hours, family dislocation and real fears for personal safety and you have the perfect recipe for discontent. Then there's the fundamental disjunction of this Labour government, between the voters who put it in power and voters some Labour MPs instinctively want to please. To over-simplify, the first group of voters tend to live in towns, not cities and the north not the south. They work and might own their own home but still feel economically insecure. They have previously voted Tory, or not voted at all, and they are now open to voting Reform. They gave Labour a chance in 2024 not because Starmer inspired them, but because they were sick of the other lot and wanted a change. These voters' views explain Starmer's moves to cut aid spending and boost defence, trim welfare bills and talk tough on immigration and crime. Weekend headlines about 'making convicts fill potholes' are laser-guided to this audience. All those things are popular with the electorate as a whole and with Starmer's swing voters in particular. Yet they still meet resistance from Labour MPs challenging No 10's electoral maths. Even as Starmer declares Reform is his party's main opponent, some Cabinet ministers argue that Labour's biggest electoral threat comes from the second group of voters 'progressives' who might defect to the Greens and Lib Dems. Some say this reflects the power of the postbag. 'A lot of our MPs are much more likely to hear from Guardian-reading liberal graduates than from potential Reform voters on estates – that's who the members are, that's who sends emails about Gaza,' says a minister. The persistent Labour belief that the real threat is on the Left is what psychologists call 'motivated reasoning', constructing arguments to suit your beliefs – often to avoid painful, contradictory truths. Here the avoided dissonance is that Labour is a Left-wing party that won power with the votes of people who lean Right. Or at least, Right on social issues such as migration and crime. On the economic issues that are likely to be the biggest test of Labour discipline later this year, things are more complicated. The Treasury last week justifiably celebrated quarterly growth figures that were above expectations. But much of the economic outlook is now decided outside the UK – trade deals and Trump tantrums could determine whether the Autumn Budget sees Rachel Reeves raising yet more money to try to balance the books. Could the parliamentary Labour Party really accept more welfare cuts, as some Government advisers are advocating? Many MPs say absolutely not, and there are already signs that No 10 is preparing to compromise with the rebels – talk of concessions on winter fuel payments and child poverty is a sign that the PM can't just steamroller over scores of unhappy colleagues. All of which increases the chances that the Treasury will have to go looking for more cash later in the year. If so, where? Intriguingly, some senior Labour figures now talk about an 'emerging consensus' between Labour and Reform voters favouring Left-wing economic policies. That's less surprising than it might sound. Farage has shifted Left on economics this year, praising trade unionists, traditional industry and even Jeremy Advisors polling shows that many Reform voters actually lean Left on some economic issues, favouring state protection for key industries and even nationalisation of utility companies. Could Reform's rise move Labour leftwards on economic policy? Here, the financial services sector is on tenterhooks, waiting for whispered cuts in cash ISA allowances and possibly to tax breaks for higher-earners' pension contributions. Some Labour economists also see scope for a populist kick at the Bank of England to pause the 'quantitative tightening' process that pushes up Government borrowing costs. In a similar vein, Reform wants the Bank to charge high street banks interest on overnight reserves, a technical-sounding tweak that would extract billions. Magicking up money by annoying wealthy savers and bankers might just allow the Chancellor to please both Labour MPs and Reform voters at the same time - but Labour can't afford to take the City lightly. Bond investors say the gilt market wants higher taxes or additional cuts at the Autumn Budget. And if they're not reassured? Goldman Sachs last week warned that the gilt market is now 'susceptible to damage' where skittish investors demand higher interest rates on Britain's loans. Ask Liz Truss how that story ends. Labour hasn't taken much joy from its first year in power, but there may be worse to come. The message from the centre of government to unhappy backbenchers will have to get tougher: You won't save your seat by complaining about the government – but you might spook the markets into a crisis that guarantees you lose it.
Times
17-05-2025
- Business
- Times
Labour rebels could force rethink on two-child cap and winter fuel
Sir Keir Starmer will seek to head off a growing rebellion over welfare reforms by introducing measures to curb child poverty which could include changes to the two-child benefit cap. Senior government figures have told The Sunday Times the administration is considering bringing forward proposals from the child poverty taskforce before next month's vote on welfare after a backlash from Labour MPs. There are claims Downing Street is investigating changes to the winter fuel payment cut due to growing concerns about the policy's deep unpopularity. It has stepped up its work reviewing the policy with polling and focus groups on how voters would respond to potential modifications. A No 10 source said the issue was 'more under discussion' than it had been a week ago,
