Health secretary refuses to rule out PIP disability benefits U-turn

Speculation is mounting that the government will freeze personal independence payment (PIP) could be frozen rather than increased in line with inflation

Health Secretary Wes Streeting refused to pour cold water on rumours that the government intends to U-turn on plans to freeze personal independence payment (PIP) as uncertainty mounts surrounding Labour’s upcoming welfare reforms.

On Wednesday, ITV News revealed that Labour MPs had been called into No 10 for talks about major benefits cuts that are expected to be announced early next week.

At least 80 of Starmer’s MPs are reported to oppose the benefits cuts and are said to be furious that a Labour government is targeting some of the most vulnerable in society.

The radical package of reforms would see:

£5bn in savings by making it harder to qualify for Personal Independence Payments – a benefit not linked to work that is meant to help people with the additional costs of their disability
Further savings by freezing PIP payments next year, so they do not rise with inflation
Raising the basic rate for Universal Credit paid to those searching for work, or in work, while cutting the rate for those who are judged as unfit for work
A billion pounds of savings ploughed into a major investment for employment support for those who are looking for a job

The aim of the measures is to massively increase the incentives for people to remain in the work-search category of Universal Credit, even if they suffer with a health condition or disability, but also to more than £6bn a year by the end of the decade.

Work and Pensions Secretary Liz Kendall is expected to announce reforms on Tuesday aimed at cutting a welfare bill that ministers have described as “unsustainable”.

Ahead of the announcement, speculation has mounted that PIP – the main benefit for working-age adults – could be frozen rather than increased in line with inflation, delivering a real-terms cut for 3.6 million claimants.

But on Sunday, reports suggested the government is considering reversing course on PIP.

Analysis from ITV News Political Correspondent Carl Dinnen

Something’s got to give, argues the government, on welfare spending. The health and disability benefits bill has been ballooning since Covid.

It is forecast to rise from £64.7 billion in 2023-24 to £100.7 billion by 2029-30.

Before the election the Sunak government was going to change work capability assessments to reflect the fact that working from home is now an option for more people.

Now the Starmer government is planning to tighten up the eligibility for Personal Independence Payments (PIPs).

But there was also a proposal on the table to freeze PIPs next year instead of letting them rise in line with inflation; a real terms cut.

Labour MPs visiting Downing Street in the last week were presented with the backdrop to these proposals but for many of them it was clear that the freezing of PIPs was a step too far.

The government has recognised this and will not now include the PIP freeze in the proposals due to be published on Tuesday.

But wrestling the rapidly expanding welfare bill into a more manageable size could still be a politically painful process.

Asked about the speculation on Sunday, Health Secretary Wes Streeting said he has not yet seen the full proposals but is sure Ms Kendall “wants to support people who need help the most” and will “make sure that there is a wide range of support”.

He told the BBC’s Sunday With Laura Kuenssberg: “I haven’t seen the proposals but you’ve seen the briefing, you’ve seen the speculation, I think the moral of the story is wait for the plans.”

During his interview, Streeting also said he believes there is an “overdiagnosis” of mental health conditions leading to “too many people being written off” as unable to work.

Campaigners have urged the government not to cut PIP, saying it would only serve to push disabled people into poverty.

A PIP recipient with multiple sclerosis told the MS Society the prospect of cuts “scares the hell out of me”.

They added: “Even with my husband’s income and my PIP payments, our finances just disappear each month.

“My MS means I have extra costs like taking supplements and accessing different therapies which can be expensive. Alongside that, our day-to-day living costs are increasing.”

SNP Westminster leader Stephen Flynn. / Credit: PA

Attacks on the government have also come from opposition parties, with the SNP’s Kirsty Blackman calling for the PM to “apologise” to disabled people for “allowing damaging speculation to run wild”.

Ms Blackman also called for any planned cuts to disability payments to be “abandoned”.

The group’s Westminster leader, Stephen Flynn, also called for the cuts to be rubbished and for the Labour party to “ditch Tory spending rules”.

Ms Kendall is expected to attempt to reassure people receiving disability benefits by introducing a “right to try guarantee” that will allow them to take up work without necessarily losing their entitlements.

The move is said to be in response to surveys suggesting disabled people and those with long-term health conditions fear they will not get their benefits back if they try employment but it does not work out.

A government source said: “The broken welfare system we inherited is trapping thousands of people in a life on benefits with no means of support, or any hope for a future of life in work.

“It doesn’t account for the reality of people’s health conditions, many of whom fear that they will be punished for taking a chance on work.

“As part of our plan for change, our reforms will deliver fairness and opportunity for disabled people, and those with long-term health conditions, protecting the welfare system so it is sustainable for the future and will always be there for those who need it.”