Labour Concessions on Disability Benefit Reform

Strategic Insights -

As part of a deal to buy off Labour rebels, Prime Minister Rishi Sunak has offered to protect hundreds of thousands of disabled benefit claimants from the government's welfare reforms. The concessions, which will cost the Treasury £1.5 billion, include restricting changes to personal independence payments (PIP) to new claimants, protecting 370,000 existing recipients. The Institute for Fiscal Studies has warned that the concession will require Rachel Reeves, the chancellor, to raise taxes or find other savings to make up the shortfall.

Key Takeaways:

  • The government's concession will protect 370,000 existing PIP claimants from changes to the benefit.
  • The cost of the concession is estimated to be £1.5 billion.
  • The Labour rebels have expressed concerns that the concessions may not be enough to stave off the rebellion, with some calling for the bill to be withdrawn.
  • The prime minister has offered to apply the rules only to new claimants to avoid cases where disabled people would lose more than £4,000 a year.
  • Over 1,000 people claim PIP every day.
  • Ministers have promised to consult disability groups before any further changes to PIP, as they plan a review of the criteria later this year.
  • Other changes being discussed include reversing a freeze on incapacity benefit for those who can never work.
  • The compromise offer came after the prime minister told MPs that there was urgent need for reform of the "broken" welfare system, but added that reform should be implemented with Labour values of fairness.
  • Several Labour MPs have said they would not back down even if concessions were made, with some calling for the bill to be withdrawn.

Statistics:

  • 370,000 existing PIP claimants will be protected from changes to the benefit.
  • £1.5 billion will be spent on the concession.
  • Over 1,000 new PIP claimants every day.
  • 114 Labour MPs have rebelled against the bill in England and Wales.
  • 62 of these Labour MPs have more PIP claimants than their majority.
  • Half the Labour MPs who signed the rebel amendment could have their majorities overturned by constituents affected by the changes.

Sources:

  • The Times
  • Institute for Fiscal Studies
  • "Labour Concessions on Disability Benefit Reform" by Oliver Wright, Chris Smyth, Patrick Maguire, Max Kendix
  • "Bill is a crude savings exercise, not a proper solution" (The Times, leading article, page 23)