Benefits reform will ensure fairness, minister says, as opponents criticise expected cuts

The UK's Labour government plans to reform the welfare system, insisting the reforms will be fair. Opposition Conservative MPs are closely watching the government's upcoming announcement of welfare cut details. Minister for Employment and Pensions, Liz Kendall, stated that the reforms, to be unveiled on Tuesday, aim to place growing welfare spending on a "sustainable footing."

The government emphasizes that reforms are necessary to reduce the ballooning expenditure on health-related welfare, which is projected to continue growing in the coming years. However, the move has met with opposition from within the Labour party, and charities have warned that it could negatively impact vulnerable groups. Previously, the government abandoned plans to freeze Personal Independence Payment (PIP) payments for a year due to strong opposition from MPs.

The upcoming proposals are the result of months of efforts to curb the surge in health-related welfare applications following the COVID-19 pandemic, and to ensure the system doesn't disincentivize some applicants from working. However, these proposals are being announced against a backdrop of worsening economic forecasts and the need to find savings so the government can meet its own self-imposed borrowing and spending rules for the future.

The reforms announced on Tuesday are believed to focus on the eligibility criteria for PIP. PIP is the main disability benefit in England and Wales, claimed after assessment to help with the extra costs of daily living arising from long-term physical or mental health conditions. PIP expenditure, claimed by some people in employment, is the second-largest component of the working-age welfare bill and is projected to almost double to £34 billion by 2029-30.

Additional subsidies under Universal Credit related to applicants' health conditions are also expected to feature in the plan. Some of the savings are expected to be used to help unemployed applicants return to work. Social Security Minister Sir Stephen Timms told the House of Commons that the plan would address "incentives to do nothing" in the system. While he did not provide details, he said the government's proposed reforms would promote more "personalized support" to help benefit recipients find employment. However, he acknowledged that speculation about welfare reform ahead of the formal announcement had caused "anxiety" for applicants, stating, "I am sorry about that; people have been concerned."

Kendall stated that the government would not "shy away from what we think is the right thing to do, which is to provide opportunity for those who can work," but would also maintain "a safety net for those who can't." She added that the reforms would ensure "trust and fairness in the social security system and make sure it's there for those who need it, now and in the years to come." Downing Street invited Labour MPs to briefings over the past week, but many backbenchers expressed serious concerns.

Conservative Shadow Secretary of State for Work and Pensions Helen Whately questioned Kendall about reports of unease among cabinet members. Whately asked the minister whether the plans had reached "collective agreement," to which Kendall responded that Whately needed to "show a little patience." According to the Office for Budget Responsibility, total spending on health and disability benefits is projected to increase from £64.7 billion in 2023-24 to £100.7 billion in 2029-30. The largest contribution to this will come from working-age adult benefit expenditure.

In the four years since the pandemic, there has been a significant increase in applications for PIP and Universal Credit payments, largely driven by an increase in applications citing mental and behavioral problems as the primary condition. Previous Conservative governments had explored making it harder for young people with mental health problems to claim PIP. However, no detailed proposals were published before the general election last July, which saw Labour return to power after 14 years in opposition.