| Ahead of Rachel Reeves’s spring statement in two weeks’ time, the chancellor finds herself operating in even more constrained fiscal circumstances than she expected when she set out her first budget last October. Back then, the Office for Budget Responsibility (OBR) estimated that she would have £9.9bn available to spend against her self-imposed limits on borrowing; but with borrowing costs up, persistent inflation, and an uncertain global economic outlook driven by Donald Trump’s tariffs, that headroom looks to have disappeared. Reeves had hoped that the spring statement would not be a major economic set piece. But now, with new OBR forecasts in mind, she has decided that rather than increase taxes or change the borrowing rules in light of exceptional circumstances, she will make significant spending cuts. One of the key targets for the cuts has been the incapacity and disability benefits system. Why has the benefits bill grown? Health-related benefits are being targeted in part because they are costing more and more each year. In 2023-24, the UK spent £48bn on incapacity and disability benefits for the working-age population, the Institute for Fiscal Studies (IFS) says – a real-terms increase of £12bn on 2019-20. OBR forecasts suggest that the bill for the working age population could reach £67bn by 2030. The IFS report sets out clear evidence that a key factor is a post-pandemic increase in mental health or behavioural conditions, accounting for more than half of the rise and 44% of all claimants. But it also notes that comparable countries have not seen a similar rise in benefit claims since the coronavirus crisis. The Resolution Foundation says that one factor is the halving of the rate at which people move off incapacity benefit since 2012, at a cost of £600m a year. But as it also says, “Britain is getting older and sicker – which the benefits system cannot solve”. Experts also say that the very low basic rate of jobless benefit pushes the health-related benefit bill up. A new report from the National Institute of Economic and Social Research finds that the UK’s social safety net for the unemployed is less generous than all but two of the 38 countries in the OECD. Can the problem be solved quickly? The shift has also been accompanied by lengthening NHS waiting lists and worsening indices of deprivation that are often linked to mental health problems. To make a lasting change to the trend is therefore likely to require investment, and patience. To make a dent by the end of the month, Labour is focused instead – as the work and pensions secretary, Liz Kendall, told ITV last month – on a narrative warning that “more of those people could work” and “there are people who shouldn’t be on benefits who are taking the mickey”. Against that narrative – of a system spiralling out of control because of a category of people cheating the taxpayer – is the fact that the benefits bill has risen as you would expect given increases in the number of people who are long-term sick or disabled indicated by other sources. Last year, the Department for Work and Pensions estimated the fraud rate among those claiming personal independence payments (Pip), the main working-age benefit for people with disabilities, at 0.4%. Disability advocacy groups and people with long experience of claiming these benefits also note that since the coalition government began moving from disability living allowance to Pip payments in 2013, the success rate for new claims has fallen significantly. Applicants say that it is now more complicated and burdensome to make a claim than ever, with stricter assessment criteria, long delays to decisions, and more regular assessments, even when a disability is severe and lifelong. What are the changes being considered? One strategy that Liz Kendall, the work and pensions secretary, has deployed is to seek to persuade the OBR to put the highest possible value on long-term reforms. That means, for example, recognising the long-term economic impact of getting people back to work as well as the immediate saving to the public purse. And about £1bn will be invested in helping the long-term sick back into work. But the brunt of the changes may seem to merit the epithet said to have been applied to parallel cuts to the civil service by Labour Together, a thinktank with close links to the government: “Project chainsaw”. ITV’s Anushka Asthana was first to report some of the details of the proposed measures, which may still change: • Making it harder to qualify for Pip payments, which are worth between £1,500 and £9,610 a year. Pip is not means-tested, and not linked to whether or not the recipient is in work: instead, it is supposed to defray some of the significant additional costs borne by people with disabilities. The average extra cost for each household with at least one disabled adult or child was £1,122 a month in 2022-23, Scope’s disability price tag report estimates, far more than is covered for even those in the highest Pip band. • Freezing Pip payments next year, a real-terms cut once inflation is taken into account. • Raising the basic rate of universal credit paid to those looking for work while cutting the rate for those judged unfit for work. The government argues that this change is a necessary rebalancing to a system which at the moment incentivises people to be categorised as sick and unable to work. Critics – like the Guardian’s Frances Ryan – regard the proposal as “a particularly blatant message” demonising those who cannot work. Taken together, all of this would be worth about £6bn a year, the bulk of it through the Pip system. That is a significant contribution to Reeves’s target. But it will involve a fundamental re-evaluation of who counts as being disabled, and what the state owes them. What kind of rebellion might the government face? Before the last election, when the Conservative government was setting out plans to overhaul the “sicknote culture” because too many people were being signed off as a result of being “rather down and bluesy”, Labour sought to present itself as a protector of those unable to work through no fault of their own. In 2024, Alison McGovern, Labour’s then acting shadow work and pensions secretary, blamed the Tories for “a record number of people locked out of work due to long-term sickness”. And, in 2023, Vicky Foxcroft, then shadow minister for disabled people, said Labour wanted “a fairer system, we want one that’s more compassionate … we need to get rid of that culture of fear.” In government, the party’s emphasis is different. That has led to significant disquiet among some backbenchers, as Aletha Adu reported last night. There is no moral case,” one said. “The [benefits bill] figures are worrying but the reality is, we’re attacking the worst-off.” But most MPs are likely to stick with the government when it puts these changes to a vote. That may help Reeves get through the next month. But if a significant number of those forced off the benefits end up in poverty, there will be a very heavy price to pay. | 