Labour plots £6bn in ‘catastrophic’ benefit cuts as PIP and Universal Credit slashed, You Won’t Believe Why

The Department for Work and Pensions (DWP) is preparing to introduce significant changes to the welfare system, with Work and Pensions Secretary Liz Kendall leading the charge to reform Universal Credit and Personal Independence Payments (PIP). The Labour Government’s plans aim to save over £6 billion by tightening eligibility for disability benefits, freezing some payments, and adjusting how Universal Credit is calculated.

Under the proposed reforms, it will become harder to qualify for PIP, a benefit designed to help people with the extra costs of living with a disability. Additionally, PIP payments will be frozen in 2026, meaning they will not rise with inflation. At the same time, the basic rate of Universal Credit for those searching for work or in work will be increased, while the rate for those deemed unfit for work will be reduced. Disability activists have warned that these changes could leave many people with severe conditions worse off financially.

The government also plans to remove some individuals from PIP entirely, redirecting £1 billion of the savings into employment support programs for job seekers. Liz Kendall has been vocal about the need for these reforms, describing the current welfare system as “broken” and failing both disabled people and taxpayers. She argues that the system has denied support to those who need it most and has locked many out of the workforce, despite their desire and ability to work with the right support.

Kendall emphasized that “good work is good for people,” improving living standards, mental and physical health, and independence. The reforms are part of the government’s broader “Plan for Change,” which aims to achieve an 80% employment rate. However, disability advocates have strongly criticized the plans, warning that they could push more disabled people into poverty rather than into employment.

James Taylor of disability equality charity Scope called the proposed cuts to PIP “catastrophic,” pointing out that disabled people rely on these payments to cover essential costs like transportation and mobility aids. He urged the government to invest in an equitable future for disabled people rather than cutting benefits and increasing poverty.

A DWP spokesperson defended the reforms, stating that the current system is unsustainable and needs to be restructured to support long-term sick and disabled people who want to work. The spokesperson emphasized that the reforms are principled and aimed at unlocking employment opportunities, rather than simply cutting spending.

The proposed changes have sparked a heated debate, with critics arguing that the reforms risk harming the most vulnerable, while the government insists they are necessary to create a fairer and more sustainable welfare system. As the plans move forward, the impact on disabled individuals and the broader economy will be closely watched.