A quarter of a million people – including 50,000 children – will be pushed into relative poverty as a result of Labour’s welfare cuts, ministers admitted today.
In the Government’s own assessment of its benefits changes, it was estimated an extra 250,000 people will be in relative poverty after housing costs in 2029/30.
The finding sparked fresh anger among charities and some Labour MPs, who have been left infuriated by the squeeze on welfare and demanded a rethink.
Chancellor Rachel Reeves risked another backlash this afternoon as she used her Spring Statement to unveil even further benefits cuts.
She told the House of Commons she was slashing the health element of Universal Credit by 50 per cent and then freezing it for new claimants.
Ms Reeves was forced to take the action after the Office for Budget Responsibility rejected her claim that measures announced only last week would save £5billion.
The watchdog assessed those changes would only amount to savings of around £3billion by 2029/30 – prompting a frantic effort by the Chancellor to find more cuts.
Liz Kendall, the Work and Pensions Secretary, had previously set out how Labour would narrow access to disability and incapacity benefits.
Chancellor Rachel Reeves risked another backlash this afternoon as she used her Spring Statement to unveil even further benefits cuts
In the Government’s own assessment of its benefits changes, it was estimated an extra 250,000 people will be in relative poverty after housing costs in 2029/30
Labour MP Richard Burgeon – a former shadow Treasury minister – told the House of Commons that taking away PIP was ‘an especially cruel choice’
In the impact assessment of the overall package of welfare changes, published this afternoon, it was estimated a total of 3.2million families would financially lose out.
The Department for Work and Pensions (DWP) document stated: ‘Overall, it is estimated that in 2029/30 there will be 3.2 million families – some current recipients and some future recipients – who will financially lose as a result of this package, with an average loss of £1,720 per year compared to inflation.
‘There are also estimated to be 3.8 million families – some current recipients and some future recipients – who will financially gain from this package, with an average gain of £420 per year compared to inflation.’
It was also estimated that 800,000 people will not receive the ‘daily living’ component of Personal Independence Payment (PIP) – the main disability benefit – by 2029/30 due to Labour’s planned tightening of rules, with an average loss of £4,500 per year.
Meanwhile, 2.25million current recipients of the health element of Universal Credit will be impacted by the freeze at average loss of £500 per year, while 730,000 future recipients will suffer an average loss of £3,000 per year.
But DWP said its modelling did not include include the impact of the £1 billion annual funding, by 2029/30, for measures supporting people into work.
It added that its analysis does not take into account new protections for those with severe lifelong conditions that the Government intends to bring forward.
After announcing her Spring Statement this afternoon, Ms Reeves faced demands to rethink cuts to health and disability benefits by Labour MPs.
Senior Labour backbencher Debbie Abrahams, who chairs the Work and Pensions Committee, told the Commons: ‘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.’
Rachael Maskell also called for the Government to look at the welfare measures, while her fellow Labour MP Richard Burgeon – a former shadow Treasury minister – said Ms Reeves had avoided more difficult decisions such as taxing wealthier people.
He said: ‘Making cuts instead of taxing wealth is a political choice, and taking away the personal independence payments from so many disabled choice is an especially cruel choice.
‘A disabled person who can’t cut up their own food without assistance, and can’t go to the toilet without assistance, and can’t wash themselves without assistance will lose their personal independence payment.’
Ms Reeves said: ‘There is nothing progressive, there is nothing ‘Labour’ about not supporting people who are disabled and sick and young people to do jobs that are commensurate with what they are able to do.’
Zarah Sultana, the independent MP for Coventry South, took a swipe at the Chancellor for recently accepting free tickets to a Sabrina Carpenter concert, which has reopened Labour’s ‘freebies’ row.
She said: ‘Since Labour came into power, 25,000 more children have been pushed into poverty due to the two-child benefit cap and now, according to the Government’s own impact assessment, over 250,000 people will be pushed into poverty as a result of these cuts, including 50,000 children.
‘So I ask the Chancellor, who earns over £150,000 annually, has accepted £7,500 worth of free clothing and recently took freebie tickets to see Sabrina Carpenter, does she think ‘Austerity 2.0′ is the change people really voted for?’
In her response, Ms Reeves pointed to how the national living wage would rise from next month.
Paul Kissack, chief executive of the Joseph Rowntree Foundation said: ‘The Chancellor said today that she would not do anything to put household finances in danger,
‘But the Government’s own assessment shows that their cuts to health-related benefits risk pushing 250,000 people into poverty, including 50,000 children. This will harm people, deepening the hardship they already face.
‘The Chancellor also said the world has changed, and today’s announcements places the burden of that changing world on the shoulders of those least able to bear the load – the 3.2 million families left worse off by these cuts.
‘With living standards for the poorest under continuing assault, the Government needs to protect people from harm with the same zeal as it attempts to build its reputation for fiscal competence.’
Dr Sarah Hughes, chief executive of Mind, said: ‘The extra cuts to benefits announced today are devastating and will push more people into a mental health crisis.
‘People are telling us that they are so worried about the situation they’d be left with no choice but to end their own life.
‘It’s a political choice to try fixing the public finances by cutting the incomes of disabled people, including people with mental health problems.
‘Benefits are a lifeline for so many people. Cuts will push people into poverty. This is policy making by numbers with little recognition of the impact on real people’s lives.’