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Ask me what a Labour prime minister should feel a moral obligation to deliver and I’d put reducing child poverty at the top of the list. Sorting out our broken social care system would be up there too. One thing that wouldn’t feature: cutting disability benefits.
Yet last week Keir Starmer attempted to frame cutting the disability benefits bill as a moral, not just economic, imperative – that Labour is “the party of work” and has a duty to reduce welfare costs. To be clear: there is a broad consensus that the welfare system is working badly for disabled people and many are not getting the support they need to move into work, but that’s a world away from the £6bn of welfare cuts being considered by the government.
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Since the pandemic, the number of working-age people out of work as a result of long-term illness has swelled by more than 750,000. There are also more people claiming health-related benefits – both means-tested out-of-work benefits, and the personal independence payment (Pip) that helps meet the additional costs of disability, which isn’t means-tested and is paid regardless of someone’s work status. One in 10 working-age adults now receive health-related benefits, up from one in 14 before the pandemic. While most new claims still come from those aged 40-64, the rate of growth has been fastest for the under-40s, and there has been an increase in mental health claims across all ages: 37% of new claims, compared with 28% in 2019.
Some people have superimposed their own pet theory on to these figures: this is about 20-something snowflakes identifying as depressed, or the legacy of long Covid, for example. The truth is a lot more complex, and the consensus among policy wonks is that we don’t fully understand it. No other wealthy country has experienced a trend as marked as this, suggesting it’s not purely about Covid or the cost of living (though it’s worth noting the UK is only now spending roughly the average for comparable countries on disability benefits). It’s more likely to be a product of how these have interacted with the UK’s public services and welfare system. Higher mortality rates, including more deaths as a result of alcohol, suicide and drugs, provide objective evidence that Britain has got physically and mentally sicker since 2020. The low rates of out-of-work benefits for those who lose their jobs – eroded since 2010 – have probably pushed more people towards applying for disability benefits than in other countries. Long NHS waiting lists, including for pain-relieving operations and mental health therapies, suggest many people’s spells out of work will be significantly extended because they can’t get the treatment they need, with terrible consequences for their long-term employment prospects. Employers are often not flexible enough about making adjustments to allow people to return to work after a period of absence.
There’s no question this needs addressing. But there are two versions of welfare reform. The first is premised on the assumption most people don’t want to be stuck at home on benefits, but are being consigned to the statistical category of “long-term sick” through poor public services and a lack of employment support. The second takes as its starting point the idea that people on disability benefits are more likely to be feckless scroungers who need to be pushed to work through benefits cuts and sanctions.
Of course you will always be able to find some people who take liberties with work. But the idea this is the main issue is plain wrong; evidence suggests it is very difficult to qualify for Pip, for example: whistleblower assessors who worked for the private companies administering it flagged how much pressure they were under to limit successful claims; and almost a third of children with disabilities serious enough to qualify for disability benefits in childhood find themselves ineligible for Pip when they turn 16.
Much of what Liz Kendall, the work and pensions secretary, has said recognises the lack of flexibility and support in the labour market for people with health issues. Some, for example, may be scared of trialling going back to work in case it’s used as evidence to strip them of Pip even if it doesn’t work out. Fixing this would deliver long-term savings but requires upfront investment. And in the absence of a clear set of governing values, this is a government overwhelmingly being driven by Treasury thinking: slashing back the state to boost defence spending and avoid putting up taxes.
The suggestion has been that the government will cut an eye-watering £6bn from the annual welfare bill, making Pip even harder to claim, and axing the health-related elements of universal credit, while investing just £1bn in employment support programmes. All this will do is push up already-high rates of disability poverty.
Starmer aides have been busy briefing that cutting these benefits will resonate with swing voters. That seems unlikely to placate the Labour MPs – including frontbenchers and the normally loyal – who are angry about this not because they think it’s a vote loser, but because they think it’s immoral. Benefits have been pared to the bone since 2010 by successive Conservative chancellors – the poorest decile of families with children lost an astounding £6,000 a year on average between 2010 and 2024 as a result of changes to the tax-benefit system. Unless chancellor Rachel Reeves finds a way of channelling more support to low-income parents, child poverty is predicted to increase by 400,000 by the end of Labour’s first term. If these welfare cuts get pushed through, that figure will be even higher. How on earth are Labour MPs supposed to defend that kind of record?
In the wake of a backlash that has spanned cabinet ministers, former chancellor Ed Balls, disability charities and thinktanks such as the Resolution Foundation, there are signs that the government may be resiling from cutting the levels of Pip. But it appears to be standing firm on making it harder to claim in the first place and reducing other disability benefits. Which makes it very hard to take at face value the government’s claim that this is about helping more disabled people back into work. It appears to be driven more by saving money in a way that hits some of society’s most vulnerable, but isn’t too politically painful.
