How confident is the government that vulnerable people will be protected from the impact of its plan to cut the welfare bill? You might find an answer in what was missing from Liz Kendall’s extensive announcements yesterday: any analysis of her plan’s impact on equality and poverty rates. When those assessments are finally published, other analysts think that they will show a sharp rise in the number of people facing serious hardship – but because their release has been timed to coincide with the spring statement, they are likely to be buried.
Kendall spoke less about the cuts than she did about the much smaller measures the government is taking in mitigation – and said she was “not interested in being tough”. But the bottom line looks very tough indeed.
What did Kendall announce?
The plans set out yesterday were in a green paper – a consultation document put out ahead of final decisions on policy. But many of the measures it contained were marked as not being up for consultation.
As expected, the government backed away from the idea of freezing the personal independence payment (Pip), the main working-age benefit for people with disabilities, after an outcry from Labour backbenchers. Here’s some of what did make the cut.
Pip assessments will become much more onerous. Pip is worth between £1,500 and £9,610 a year, and is meant to mitigate some of the significant additional costs associated with having a disability. It is not means-tested, and not linked to whether or not the recipient is in work. In England and Wales, 3.66 million claimants are eligible for Pip, against 2.14 million in January 2020.
Pip gets paid out on the basis of a scored assessment measuring the applicant’s difficulties with various everyday tasks and mobility. Now, instead of just needing to hit an overall score, applicants will have to reach a minimum threshold in specific categories to qualify for the “daily living” component of the payment.
What that means in practice is that many people with life-changing disabilities, who are disproportionately likely to be living in poverty, will lose a lot of money. You can see the scoring system here: now, somebody who needs help to take medication, eat, wash their lower body, go to the toilet and put on underwear may not be eligible, because all of those issues come under different categories.
This change is responsible for the vast majority of the savings that will be made, but it barely got a mention in an article by Keir Starmer in the Times this morning: he said only that it would “target more fairly those who have the highest levels of sickness and disability”. In the absence of any government figures, the Resolution Foundation estimated that between 800,000 and 1.2m people will lose between £4,200 and £6,300 a year.
A big cut to incapacity benefit, and a smaller increase to the basic rate of universal credit. The government has said this change is necessary to avoid incentivising people to get themselves signed off work. Yesterday, we got a sense of the extent of the change: an increase of £768 a year to the basic rate of UC, against a decrease of £2,444 a year for new claimants of the incapacity top-up. About 1.8m people already claiming the top-up will have their payments frozen until 2030 – so a real-terms cut every year.
The work capability assessment for means-tested incapacity benefits will be scrapped. Instead, a single system will be used for both Pip and the incapacity top-up to UC.
But reassessments for people with the most severe conditions will end. At the moment, even those with very severe lifelong disabilities are subjected to repeated checks.
Under-22s could be prevented from claiming the health top-up to universal credit. This change will be subject to consultation. The government says that any savings will be reinvested into work support for young people.
A new “right to try” guarantee, ensuring that anyone disabled or sick can attempt to work without putting their benefits at risk if it proves to be impossible.
About £1bn more to be spent on employment support to help the long-term sick back into work. But Citizens Advice has warned that without much broader support in place around issues like housing, the investment will not be enough to counter the losses that many of the same people will now face.
How much money will be saved?
Kendall said that by 2029/30, the cuts should amount to about £5bn a year. She also argued that they were necessary to blunt the sharp growth in the number of people who are out of work in the long term, and so would have a wider positive economic impact.
The Institute for Fiscal Studies (IFS) said that it was hard to be certain about the amount that the Pip eligibility changes will save, because “the way claimants approach the assessment is likely to change in response”.
The IFS says that the UK’s bill for incapacity and disability benefits has risen by £12bn since 2019-20, and now stands at £48bn; it is forecast to hit £67bn by 2030 if nothing changes. But it’s also worth noting, as Patrick Butler points out in this piece, that public spending on pensioners’ entitlements has risen with little political controversy from 5.3% of GDP to 6% over the last 20 years, during which period the working-age adult benefits bill has remained static.
Could the government face a backlash?
It is already in the middle of one. As Patrick Butler wrote in this analysis piece: “If campaigners had been relatively restrained in their criticism of government up to now – Labour had to be better than the last lot – it felt that accord was unravelling.”
The Disability Benefits Consortium, an umbrella body, described the changes as “immoral and devastating”. Like other charities, it warned that the result would be more disabled people living in poverty, and in worse health. The disability equality charity Scope said the changes would likely result in more pressure on the NHS and social care system.
The Guardian’s scathing leading article calls the changes “a wrong and cruel decision that ministers should live to regret”. Jessica Murray heard from some of those who will be affected by these changes on Sunday. And for a sense of how angry disabled people are, see this piece on the Disability News Service from last week on the response from activists with the Disabled People Against Cuts campaign. One leading activist, Ellen Clifford, urged those attending to respond in “a way that teaches future governments not to come for us again.”
What about in parliament?
Yesterday, the Guardian’s Jessica Elgot confirmed the answer to a key question that has been hazy in the days ahead of the announcement: there will have to be a parliamentary vote on the changes to the Pip assessment system. That is expected to come within weeks.
Many Labour backbenchers have registered their disquiet, some of them on the record, over the last week. The reversal on freezing Pip from next year may have mollified some, and even if dozens of backbenchers rebel – around 30 are thought to be ready to do so – the measure is still all but certain to pass. But the vote is still likely to be the most severe test of Keir Starmer’s authority so far.
Notably, few of those who opposed the bill were among the most recent intake of MPs, who tend to be very loyal to Keir Starmer. Instead, it fell to longer-serving Labour MPs to lead the revolt. “I would like [Kendall’s] department to be able to look my constituents in the eye … to tell them this is going to work for them,” said Clive Lewis, the MP for Norwich South. “My constituents, my friends, my family are very angry about this and they do not think this is the kind of action a Labour government takes.”
