Labour's full £5bn PIP cuts plan explained as DWP 'to freeze benefits' for 3.6m Brits

Reports have emerged detailing the extent of the welfare cuts Labour plans to institute, with indications that ministers are aiming to cut £5 billion from the Personal Independence Payment (PIP), a benefit relied upon by 3.6 million people. PIP, designed to aid those with additional expenses due to disability, whether they’re employed or not, could see stringent qualification criteria applied to get the bill down, according to reports.

It’s rumoured eligibility assessments will be tightened, making it tougher for claimants to receive support. ITV has reported that a freeze on PIP payments for next year is also on the cards, halting their inflationary increase as was customary in prior years.

Furthermore, Policy Exchange — a prominent right-wing think tank — recently released a report that hints at the potential shape such reforms may take, advocating “major reform” to make PIP a “conditional” benefit especially for the 16 to 30 age group, linking it with requirements to seek employment or engage in education or training barring exceptional instances.

Yet many specialists are contesting the rationale behind the revisions, stressing PIP’s purpose as an aid rather than an incentive for job hunting, as it is not categorised as a benefit for the unemployed. Such concerns signal further debate on the mooted £5 billion savings.

Critics argue that this approach contradicts Labour’s stated goal of increasing employment. James Taylor, Executive Director of strategy at disability equality charity Scope, warned: “Ripping PIP away will be catastrophic for disabled people. PIP exists because life costs more if you are disabled. Those costs won’t disappear if the government squeezes eligibility.

"Many disabled people use PIP to get to and from work and to pay for essential equipment like mobility aids. Making it harder to get benefits will just push even more disabled people into poverty, not into jobs. The Chancellor has a choice – cut benefits and increase poverty, or invest in an equal future for disabled people. Making the wrong choice will have a devastating impact on disabled people and their families.”

Areas thought to be at risk:

• Top rate of incapacity benefit, which at present means those deemed unfit for any work are paid more than £800 a month
• Personal Independence Payments (PIPs) revamped with it much harder to qualify for money
• PIP payments next year are also expected to be frozen
• Tougher mental health assessment criteria

The Department for Work and Pensions (DWP) has yet to provide any confirmed details about the upcoming changes to benefits, with an announcement expected before Rachel Reeves’ Spring Statement on 26 March.

Last month, Work and Pensions Secretary Liz Kendall criticised those who claim benefits instead of working as “taking the mickey.”

A DWP-commissioned report found that around half of those on health and disability benefits believed they would never be able to work. However, Ms Kendall said: “I don’t blame people for thinking that they can’t, because they’re stuck on a waiting list for treatment, they haven’t had the proper support that they might need from the job centre.” Ahead of the much-anticipated Green Paper, the DWP announced 1,000 work coaches are set to be deployed to jobcentres across the UK to help sick and disabled people find employment.

The government has said the reforms aim to tackle serious issues with the benefits system and gave some examples of where it’s been going wrong. Last week it said the current system:

• Asks people to demonstrate their incapacity to work to access higher benefits, which also then means they fear taking steps to get into work.
• Is built around a fixed “can versus can’t work” divide that does not reflect the variety of jobs, the reality of fluctuating health conditions, or the potential for people to expand what they can do, with the right support.
• Directs disabled people or those with a work-limiting health condition to a queue for an assessment, followed by no contact, no expectations, and no support if the state labels them as “unable” to work.
• Fails to intervene early to prevent people falling out of work and misses opportunities to support a return to work.
• Pushes people towards economic inactivity due to the stark and binary divide between benefits rates and conditionality rules for jobseekers compared to those left behind on the health element of Universal Credit.
• Has become defined by poor experiences and low trust among many people who use it, particularly on the assessment process.

Work and Pensions Secretary, Rt Hon Liz Kendall MP said: “We inherited a broken welfare system that is failing sick and disabled people, is bad for the taxpayer, and holding the economy back. For too long, sick and disabled people have been told they can’t work, denied support, and locked out of jobs, with all the benefits that good work brings.

“But many sick and disabled people want and can work, with the right support. And we know that good work is good for people – for their living standards, for their mental and physical health, and for their ability to live independently.

We’re determined to fix the broken benefits system as part of our Plan for Change by reforming the welfare system and delivering proper support to help people get into work and get on at work, so we can get Britain working and deliver our ambition of an 80% employment rate.”