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Approximately 50,000 individuals who acquire disabilities or chronic illnesses will unfortunately be pushed into poverty by the end of the decade due to reductions in incapacity benefit. This is despite the government’s decision to scrap major aspects of its welfare reform plans, according to warnings from members of parliament.
The work and pensions select committee report expressed approval for the government’s recent decision to abandon some of the more contentious elements of its disability reforms, following a parliamentary revolt by more than 100 Labour backbenchers.
The committee welcomed the elimination of plans to redesign the eligibility criteria for personal independence payment (Pip), which would have disallowed around 800,000 people from the benefit by the decade’s end.
The government also abandoned plans to freeze the incapacity element of universal credit for existing claimants, affecting over 2 million people by 2029-30. However, proposals to halve the weekly rate for new claimants remained in place.
According to the committee, Labour made the correct decision in the end. Nonetheless, they insisted that the remaining planned cuts to universal credit should be deferred until their impact on poverty, health, and employment could be fully understood.
The government, bruised by the emasculation of its bill aimed at saving £5bn annually by the end of the decade, had the Prime Minister, Keir Starmer, admit that No 10 “didn’t get the process right”.
While existing universal credit claimants and those with severe or terminal conditions will be protected, claimants with limited health capacity for work will witness their monthly awards decrease from £423.27 to £217.26 starting next year.
Debbie Abrahams, the Labour chair of the committee, stated, “Although we welcome the concessions made to the universal Credit bill, issues with these welfare reforms persist, particularly concerning the reduced financial support for newly sick and disabled individuals.”
Abrahams noted that, according to the government’s analysis, around 50,000 individuals claiming universal credit after developing a health condition or disability from next April will be impoverished by 2030 due to these cuts.
“We recommend a delay in the cuts to the universal credit health premium, considering that additional NHS capacity, employment support, or changes in the labour market to help individuals remain in work have yet to materialize,” Abrahams stated.
“While we advocate for a reformed and sustainable welfare system, it’s crucial to protect the wellbeing of those interacting with it. The key takeaway from last month’s events is that policy changes to health-related benefits must be assessed for potential risks to claimants before implementation,” added Abrahams.
The committee also requested the abandonment of plans, currently open for consultation, to prevent young people aged 18-22 from claiming incapacity benefit.
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p class=”dcr-16w5gq9″>“We share the ministry’s concern about young people being trapped in economic inactivity before their working lives even begin, but we fail to comprehend why this means they should forfeit their entitlement to universal
Source: https://www.theguardian.com/politics/2025/jul/29/tens-of-thousands-at-risk-of-poverty-despite-labours-benefit-u-turn-mps-warn
