Backbench revolt grows over ‘merciless’ profit cuts that would push households of fifty,000 extra youngsters into poverty
Labour was hit by a ferocious backbench revolt today as a Government assessment found welfare cuts could push 250,000 more people into poverty – including 50,000 children.
MPs lined up to round on Chancellor Rachel Reeves in the Commons after her Spring Statement. They branded her cuts ‘cruel’ and demanded a U-turn – while calling for more taxes on the wealthy.
Ms Reeves claims her reforms will save £4.8 billion after her growth destroying October budget.
An internal impact assessment by the Department for Work and Pensions (DWP) found 3.2 million families will lose on average £1,720 a year by April 2030.
And while 3.8 million families will gain £420 annually, the assessment also found that 150,000 family carers are set to lose up to £500million of payments in total.
In the Commons Ms Reeves defiantly defended her cuts, hitting back that the welfare system was ‘broken’ and saying without the changes ‘we are writing off an entire generation’ of people on sickness benefits.
Asked if she was ‘punishing the most vulnerable’, she said: ‘There’s nothing progressive and nothing Labour about losing control of the public finances.
‘That’s what the previous government did… It saw prices increase. It wasn’t the wealthy who paid the price of that, it was ordinary working people and those on fixed incomes.’
In the Commons, Rachel Reeves (pictured) defiantly defended her cuts, hitting back that the welfare system was ‘broken’ and saying without the changes ‘we are writing off an entire generation’ of people on sickness benefits
Debbie Abrahams (pictured), chairman of the work and pensions committee, said: ‘All the evidence is pointing to the fact that the cuts to health and disability benefits will lead to increased poverty’
At an evening press conference at Downing Street she added: ‘I’m confident our plans, far from increasing poverty, will actually result in more people having fulfilling work, paying a decent wage to lift themselves and their families out of poverty.’
But earlier in the Commons she had faced a barrage of criticism from Labour MPs while unveiling details of the savings.
Debbie Abrahams, chairman of the work and pensions committee, said: ‘All the evidence is pointing to the fact that the cuts to health and disability benefits will lead to increased poverty, including severe poverty, and worsened health conditions as well.
‘How will making people sicker and poorer help in terms of driving our economy up and people into jobs?’
The DWP assessment concluded: ‘We estimate there will be an additional 250,000 people (including 50,000 children) in relative poverty after housing costs in 2029-30.’
Relative poverty is when people can afford basic necessities but struggle to pay for goods beyond this. Meanwhile absolute poverty is when people struggle to even afford the basics, such as food or household bills.
The assessment found the cuts could push as many as 200,000 people into absolute poverty.
One in ten working-age people are claiming a sickness or disability benefit. The number has soared by 800,000 since before the pandemic – a surge of 45 per cent. And those claiming Personal Independence Payment (PIP), a disability benefit, is set to double to 4.3 million.
Under Labour’s reforms, eligibility for PIP will be made stricter, completely cutting or reducing payments for nearly 1 million claimants.
Ms Reeves had said the health element of Universal Credit (UC) which is paid if your ability to work is limited, will also be almost halved from £97 to £50 from April 2026 for new claimants. And for existing claimants it will be frozen at the current rate until 2030.
Darren Jones (pictured), chief secretary to the Treasury, also faced ridicule after defending the cuts by comparing them to slashing pocket money for his children to encourage them to get a Saturday job
Ms Reeves claims her reforms will save £4.8 billion after her growth destroying October budget
Referring to the latest cuts, Labour peer Lord Blunkett (pictured) said: ‘I think there were a couple of surprises. One was obviously the shunting in of another £500million-worth of savings from the welfare budget’
But she was then forced to make further cuts at the eleventh-hour today after the Office for Budget Responsibility rejected her initial Treasury estimates.
The watchdog said it could not assess some of the reforms and put the amount saved at £3.4billion instead of the Labour figure of £4.8billion. It meant Ms Reeves had to increase her cut on the health element for new claimants by almost half.
Referring to the latest cuts, Labour peer Lord Blunkett said: ‘I think there were a couple of surprises.
‘One was obviously the shunting in of another £500million-worth of savings from the welfare budget, I didn’t feel that was a terribly good way of making policy.’
Darren Jones, chief secretary to the Treasury, also faced ridicule after defending the cuts by comparing them to slashing pocket money for his children to encourage them to get a Saturday job.
He told the BBC: ‘If I said to my kids: ‘I’m going to cut your pocket money by £10 per week, but you have to go and get a Saturday job’. The impact assessment on that basis would say that my kids were down £10, irrespective of how much money they get from their Saturday job.’
Ms Reeves said comparing efforts to get people into work with encouraging children to get a Saturday job is ‘not the right analogy’.
Steve Darling, the Liberal Democrats welfare spokesman, branded the remarks ‘incredibly insulting’, adding he ‘owes an apology to the hundreds of thousands of people his government’s decision has pushed into poverty.’
