Labour U-turn on £5bn advantages crackdown as Keir Starmer and Liz Kendall ‘put together to backtrack on chopping disabled folks’s funds’

Labour is tipped to U-turn on their £5billion benefits crackdown as Sir Keir Starmer and Liz Kendall prepare to back down on a key plank of the controversial plans.  

The government is set to unveil a series of welfare reforms next week, which would see about 1million people lose their disability payments, as Labour attempts to grapple with the country’s growing benefits bill. 

Ministers have suggested that in future only the most severely disabled people qualify for support amid an overhaul of eligibility criteria. 

Among the proposed cutbacks included freezing Personal Independence Payment (PIP) – in effect making real term cuts – which could have accounted for the bulk of overall savings estimated between £5billion and £6 billion. 

The major upheaval would mean payments slashed for those with long-terms conditions, people with mobility struggles, those with mental health conditions, those needing a hearing head and people who struggle with basic daily processes.

Downing Street had also previously warned that without action, benefits will ‘swallow more taxpayers’ money and leave more people trapped in a life of unemployment and inactivity’.

But despite warnings, the overhaul was delayed for a week despite nothing in the government’s schedule amid rumoured in-party revolt and intense discussions behind the scenes – and now some PIP changes could be scrapped.

Fears emerged that dozens of MPs were against the reforms, with ministers believed to have been shaken after politicians accused them of setting out ‘unfair’ measures that even ex Tory Chancellor George Osbourne had opposed. 

During an episode of his podcast Political Currency with ex-Labour shadow chancellor Ed Balls, Osbourne remarked how he thought it wouldn’t be ‘regarded as very fair’ to reform PIP, adding: ‘What I did try to do was reform PIP.’

And some major Labour players reportedly hit back against current proposals, including Starmer’s second-in-command and deputy Prime Minister, Angela Rayner, as well as energy secretary Ed Miliband.

Many have also spoken out against cuts to PIPs in particular, which disability charity bosses have called ‘deeply damaging’, ‘devastating’ and ‘a disastrous move’, with dozens of MPs believed to have used private meetings to urge a rethink on plans. 

According to the Guardian, a cabinet meeting was held last Tuesday with many raising worries about how the Government would be perceived if they did not increase PIP in line with inflation as well as making it harder to receive. 

To freeze PIP or change the requirements to be eligible for the benefit, Labour would have to change primary legislation, putting them at peril of a possible Labour revolt at Westminster – both in the Commons and the Lords. 

Numerous Labour MPs have also said they would not back any of the proposals if it came to a parliamentary vote., according to the Observer. 

But SIr Keir Starmer remained defiant about his proposals on Thursday, making a personal plea to encourage Labour MPs to back him on the benefits cuts whilst recalling how his late mother and brother dealt with disabilities. 

He lashed out at the current ‘indefensible’ welfare system as he was challenged over potential cuts during Prime Minister’s Questions this afternoon.

He told MPs: ‘I come from a family that dealt with a disability through my mother and brother over many years. 

‘So I do understand the concerns that have been raised… but we inherited a system which is broken.

‘It is indefensible, economically and morally, and we must and we will reform it. We will have clear principles, we will protect those who need protecting.

‘We will also support those who can work, back to work, but Labour is the party of work, we’re also the party of equality and fairness.’

Later in today’s session of PMQs, Sir Keir was told by Labour backbencher Richard Burgon to make the ‘moral’ choice and introduce a wealth tax.

This was instead of ‘making the poor and vulnerable pay’ by cutting benefits for disabled people, the left-wing MP added.

The reforms included getting rid of the ‘work capability assessment’ for benefits based on incapacity for work and preparing people with long-term sickness for work.

Ms Kendall was also expected to cut the top rate of benefits for those deemed unfit to work, which currently stands at more than £800 per month – twice the jobseekers’ rate.

But sweeping changes to the eligibility criteria for PIPs, paid out regardless of whether the person is working, would have accounted for the bulk of the changes.

Around 3.2million people claim PIPs – up by more than a million since 2019. Roughly five million people are expected to be claiming them by the end of the decade.

The government suggested making those changes in particular is not desirable but nevertheless necessary – the cost of PIPs is forecast to increase by £15billion in real terms by 2030.

Ministers were said to have still been battling the budget watchdog as they work out how much of the £5 billion savings can be used so the government does not need to make any more cuts or raise taxes any further this month.

But it was known that some of the savings were going to be used to raise the basic rate of universal credit and create a bumper £1billion package of employment support.

This was previously branded a ‘moral’ move by the government, to facilitate and incentivise people getting into work.

PIPs – the major controversy of the package – are currently awarded on a points system, with applicants getting scored based on how difficult they find certain everyday and mobility-related activities.

The number of points they get determines the grant they receive. Amounts range between £1,500 and £9,600 a year.

But Labour had planned requiring applicants to score at least four points on at least one activity to qualify for being considered for a payment. The need for a hearing aid does not meet the threshold.

Those who need help to wash their hair or body below the waist would not have qualified for support – but those who need help to wash their upper body would. Needing help going to the toilet would meet the threshold – but those who need reminding to use it would not.

Those who need help cooking a meal would qualify for support – but those who could use a microwave would not. Needing to be reminded to see people face-to-face would not be supported – but needing help to actually have those interactions would.

Applicants who get the four points needed to qualify for being considered would then need to get another four points on top of that to get the lower rate – and another eight to get the higher one.

Making the eligibility criteria more exclusive in this way was also expected to hit those with mental health problems hard, who account for 37 per cent of new PIP awards – up from 28 per cent pre-pandemic.

Mental health problems are thought to be the reason behind a doubling in the number of under-40s claiming disability benefits.

But as the government are expected to make a 180-spin on their plans the SNP have called on Sir Keir Starmer to ‘apologise’ to disabled people for ‘allowing damaging speculation to run wild’.

Kirsty Blackman, the party’s work and pensions spokeswoman, said any planned cuts to disability payments should be ‘abandoned’ and accused Labour of ‘deliberately fuelling speculation’ in the media about its intentions.

James Taylor, executive director at disability charity Scope, said giving disabled people ‘greater confidence to try work’ was ‘a good move’, but warned against making significant cuts to benefits.

He said: ‘We hope that releasing news of this scheme at this time isn’t a smokescreen designed to blur the lines between in and out of work benefits.

‘(Personal independence payment) exists because life costs more if you are disabled. It isn’t an out of work benefit.

‘Making it harder to get benefits will just push even more disabled people into poverty, not into jobs.’

Asked about Labour’s welfare plans during a press conference on Saturday, Sir Keir said: ‘I have made the principles clear enough. We need to support those who need support, and to protect them.

‘But at the same time we need to make sure that we support and protect those who need to and are able to get into work, which the current arrangements I don’t think adequately do.

‘That’s why it’s important we make the case for reforming welfare, which is what we are doing.’

A Conservative Party spokesperson said: ‘Labour is failing to take the action needed to tackle the unsustainable welfare bill.

‘Their inaction has already cost the taxpayer £2.5 billion and counting.

‘The Conservatives are united in the belief that those who can work should, which is why we had a bold plan at the election to save £12 billion from the welfare bill.

‘Labour have done no original thinking of their own. The dithering, delay and division over the need to bring spending on benefits down is not fair for British taxpayers.’

MailOnline has approached the DWP, No 10 and the Labour Party for comment.