The UK Labour government is planning significant cuts to disability benefits, including Personal Independence Payment (PIP), in a bid to appease financial markets concerned about the party's economic policies. The move, driven by Treasury officials seeking significant savings, could have 'disastrous consequences' for disabled people, warns Scope, a leading disability charity.
A leading charity has warned that reported cuts to disability benefits could have 'disastrous consequences' for people across the UK. David Southgate, policy manager at Scope and advocate for disability equality, emphasized the significance of benefits like Personal Independence Payment (PIP), describing them as 'a lifeline' for those with disabilities.
He noted the extra costs faced by disabled people, which can exceed £1,000 a month on average, stating that these benefits help pay for vital equipment, home support, and proper heating to preserve health. 'We're hearing constantly from people who already can't afford these, so taking further support away would be devastating,' Southgate said. Although he acknowledged the need for system reform, he urged the Government to work with disabled people to fix what he calls 'our broken benefits system'. There are indications that Labour intends to implement major cuts to disability benefits overseen by the Department for Work and Pensions (DWP) in an attempt to calm market nerves regarding their economic policies. Within Downing Street and the Treasury, high-level sources believe significant trims in the DWP budget are essential, pinpointing PIP as a key area for review. Chancellor Rachel Reeves has instructed civil servants to take a 'tough' approach on spending, favouring departmental savings rather than new tax increases. Key figures in No10 and the Treasury, both keen to tackle Reform's rising popularity, are driving the changes, reports Cambridgeshire Live. The Government is poised to implement harsh measures to achieve significant savings, such as more stringent eligibility for disability benefits. These reforms are set to be unveiled in conjunction with the March Budget and a June spending review, which will establish departmental budgets. At present, individuals can receive up to £9,600 annually through Personal Independence Payment (PIP) to help cover additional costs associated with disabilities and health issues. Notably, there's been a surge in mental health-related claims, with the number of new monthly payments for anxiety or depressive disorders leaping from 2,200 in 2019 to 5,300 in 2023. Officials are now reportedly looking to impose tighter controls over who qualifies for disability payments. This could involve more rigorously defined criteria for eligible mental health conditions and possibly demand stronger medical proof before claims are accepted. Despite the potential tightening of purse strings, Work and Pensions Secretary Liz Kendall has dismissed the notion of replacing cash benefits with vouchers. Nonetheless, other alternatives to the current weekly cash payments system are being considered. Labour has signalled a move away from the stark 'fit for work' or 'not fit for work' dichotomy, aiming for a more nuanced system. These suggested changes resonate with policies from Rishi Sunak's tenure as Prime Minister, where revamping the PIP system was central to his welfare agenda. The push for these reforms is economically motivated, with forecasts showing potential spikes in disability benefit costs. The markets were volatile on Friday, with 30-year Government bond interest rates reaching peaks not seen since 1998. Barclays Bank's UK chief economist, Jack Meaning, warned of a 'high chance' that the Chancellor might need to announce emergency spending cuts in the upcoming Spring Budget. Recent market shifts have effectively erased the £10billion 'fiscal headroom' that Reeves had reserved for her fiscal promises. As economic growth estimates fall and inflation lingers, the Treasury is increasingly focusing on spending cuts. A DWP spokesperson stated: 'We don't comment on speculation. We have been clear that the current benefits system needs reform so it is fairer on the taxpayer and people get the support they need to move into work.'
DISABILITY BENEFITS LABOUR PARTY UK ECONOMY SPENDING CUTS PERSONAL INDEPENDENCE PAYMENT (PIP)
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