Government to unveil welfare cuts amid financial strain

THE GOVERNMENT will outline changes to disability welfare payments on Tuesday as it looks to address financial challenges caused by slow economic growth.

Labour says the reforms are necessary to close a £22 billion fiscal gap it claims was inherited from the Conservatives after last year’s election.

Work and pensions secretary Liz Kendall will present the proposed changes in parliament, despite criticism from some Labour MPs.

The announcement comes ahead of chancellor Rachel Reeves’s Spring Statement on 26 March, where further spending cuts across government departments are expected to be detailed.

Impact of the pandemic

Prime minister Keir Starmer’s spokesman said Monday that while the changes were necessary, those in need would continue to receive support.

“We’ve got a duty to fix the system to ensure that safety net is always there for the most vulnerable and severely disabled, but also supports people back into work,” he said.

“We’re the only major economy whose employment rate hasn’t recovered since the pandemic. There is a duty to fix the broken system that is letting millions of people in this country down.”

He added that since the pandemic, there had been a rise in people applying for disability benefits, with anxiety and depression cited as their main conditions.

Government forecasts indicate that by the end of the decade, the number of working-age people in the UK claiming disability benefits, or PIP, is expected to rise.

The UK spent £296.3bn on welfare in 2023/24, with nearly half allocated to pensions, according to the Office for Budget Responsibility. This accounted for almost 11 per cent of GDP.

Criticism from Labour MPs

Labour MP Clive Lewis said the government’s approach to disability benefits was contradictory.

“On the one hand it’s trying to fix our broken welfare system and at the same time, save money. This is not possible,” he told AFP on Monday.

“And it is doubly impossible if we are to adhere to the Labour values people elected this government to pursue.”

Labour MP Rachael Maskell also raised concerns, warning that changes to eligibility criteria could push many disabled people further into poverty.

“I am deeply concerned that many disabled people will end up in deeper poverty as a consequence of proposals to change the eligibility criteria for social security,” she told AFP.

She urged the government to reconsider and ensure disabled people are included in discussions about policy changes.

Tuesday’s announcement follows a recent government decision to increase defence spending, adding further pressure on public finances.

Meanwhile, official data released Friday showed the UK economy unexpectedly contracted in January, increasing financial concerns ahead of the Spring Statement.

Uncertainty over the impact of tariffs introduced by former US president Donald Trump has also added to economic pressures.

(With inputs from AFP)