Plan to freeze PIP disability benefits may be dropped

According to the BBC, the UK government is considering abandoning its previous plan to freeze some disability benefits. Initial reports indicated that Personal Independence Payment (PIP) would not increase with inflation for a year. However, many MPs, usually loyal to the Labour Party, expressed strong opposition at meetings in 10 Downing Street, as well as to party whips and ministers, prompting a reevaluation of the policy.

While the government is expected to cut billions of pounds from the welfare budget by tightening PIP eligibility criteria, abandoning the freeze plan could avoid a potentially damaging vote in the House of Commons. Employment and Pensions Secretary Liz Kendall is scheduled to detail the welfare reform plans in a green paper next week. Part of the reform will also include a "try before you buy" guarantee, allowing disabled people to try employment without risking the loss of benefits.

Following Liz Kendall's announcement of her plans, Chancellor of the Exchequer Rachel Reeves will announce the full scale of welfare spending cuts, expected to be between £5 billion and £6 billion, in the Spring Statement on March 26. Reeves previously stated that the government needs to "control" welfare spending and believes the system is not working for taxpayers or beneficiaries. The Office for Budget Responsibility predicts that total spending on health and disability benefits is expected to increase from £64.7 billion in 2023-24 to £100.7 billion in 2029-30, with working-age adult benefits being the largest contributor to the increase, and PIP being the second largest component of working-age benefit spending.

In 2023-24, PIP totaled £18 billion and is projected to almost double to £34 billion by 2029-30. This means the number of claimants will increase from 2.7 million to 4.2 million. Although the Labour Party holds a majority in the House of Commons, the plan to freeze PIP could pass a vote, but internal divisions would be highlighted. Sources told the BBC that the upcoming measures will still be difficult, and restricting PIP eligibility may cause concern among some Labour MPs. Even with stricter eligibility measures, sources say that PIP spending will still increase, but at a slower rate than expected.

PIP is designed to help people with long-term physical and mental health problems pay for extra living costs. Some recipients are working, and they believe PIP provides the necessary support to enable them to continue working. But PIP is also provided to those who are severely disabled and unable to work. Some MPs who broadly support welfare reform have told the BBC that they have been assured that severely disabled people will not be expected to work and will not lose their benefit eligibility. In addition, changes to the welfare system are expected after the government announced it would abolish NHS England, which is responsible for running the UK's healthcare system. Health Secretary Wes Streeting said he plans to make further cuts to improve the efficiency of healthcare services. He said he has identified "hundreds" of official bodies that are "disrupting patient safety and the regulatory landscape."

Streeting said: "Patients and staff can see inefficiencies and waste in healthcare services. My team and I are reviewing the budget line by line, focusing on cutting bloated bureaucracy." A spokesperson for the Department for Work and Pensions said: "We have made it clear that the current welfare system is broken and needs reform to help people with long-term illnesses and disabilities who can work find employment, ensure people get the support they need, and be fair to taxpayers. Without reform, more people will be excluded from employment, even though many want to work. This is bad for the economy and bad for people."