Benefits overhaul will be fair, insists Liz Kendall

The work and pensions secretary has insisted her planned overhaul to benefits rules will be fair, as Labour MPs wait for details of expected welfare cuts.

Liz Kendall said the plans, to be published on Tuesday, would put rising benefits expenditure on a “sustainable footing”.

The government insists changes are required to reduce ballooning spending on health benefits, which are predicted to continue rising in the coming years.

But the move has faced opposition with Labour ranks, and has already led charities to warn of the potential impact on vulnerable claimants.

Ministers have already abandoned plans for a one-year freeze to PIP payments, after disquiet from MPs.

The proposals to be unveiled on Tuesday are the result of months of work to bear down on rising claims for health-related benefits in the wake of the Covid pandemic and ensure the system is not trapping some claimants out of work.

But they are being unveiled against the backdrop of worsening economic forecasts, which have increased the need to find savings to allow the government to meet its self-imposed rules on future borrowing and spending.

Ministers are expected to shelve plans not to raise personal independence payments (PIP), the main disability benefit in England and Wales, in line with inflation next year after pushback from within Labour.

It is thought that instead the changes announced on Tuesday will now focus on eligibility for PIP, which recipients claim following an assessment to help meet daily living costs from long-term physical or mental health conditions.

Spending on PIP, which is claimed by some people in work, is the second-largest element of the working-age welfare bill and is projected to almost double to £34bn by 2029-30.

Top-up payments under Universal Credit linked to claimants’ health are also expected to feature in the plans. Some of the money saved is expected to be spent on helping jobless claimants back into work.

Speaking in the Commons, Social Security Minister Sir Stephen Timms said the package would look to tackle “incentives to inactivity” in the system.

Although he did not offer details, he said the government’s proposed changes would promote more “personalised support” to help those on benefits find employment opportunities.

But he admitted speculation in the run-up to the official announcement had been a source of “anxiety” for claimants, adding: “I’m sad that that’s happened, and that people have been concerned.”

Kendall said the government would not “shy away from the decisions that we believe are right to give opportunities to people who can work” but would also maintain “security for those who can’t”.

She added the changes would ensure “trust and fairness in the social security system, and to ensure it’s there for people who need it now, and for years to come.”

Labour MPs have been invited to briefings by Downing Street over the past week, but there is significant concerns among many backbenchers.

The Conservatives’ shadow work and pensions secretary Helen Whately questioned Kendall on reports about unease among the Cabinet.

Ms Whately asked the minister whether there was “collective agreement” on the plans, with Kendall responding that Whately would have to “show a little patience”.

Total spending on health and disability benefits is forecast to rise from £64.7bn in 2023-24 to £100.7bn in 2029-30.

The biggest contributor to this would be from welfare spending on working-age adults, according to the Office for Budget Responsibility.

Claimant numbers, for PIP and Universal Credit payments, have increased significantly in the four years since the pandemic, driven by an increase in those claiming for mental and behavioural problems as their main condition.

The previous Conservative government had explored making it harder for younger people with mental health conditions to claim PIP.

But no detailed proposals were announced ahead of the general election last July, which saw Labour return to power after 14 years out of office.