The UK Labour government plans to cut welfare spending by £5 billion annually through 2030, capping Personal Independence Payments (PIP) and health top-ups on incapacity benefits. The decision has attracted criticism from disability groups and divided Prime Minister Keir Starmer’s party.
Government rationale and fiscal issues
Work and Pensions Secretary Liz Kendall defended the cuts, saying they will help disabled people and put the welfare system on a “sustainable” footing in the long term. Chancellor Rachel Reeves cited an “unsustainable” surge in PIP claims, with forecast costs nearly doubling to £41 billion by 2030, with total disability and incapacity benefits projected at £100 billion.
Labour divisions and public backlash
The decision has sparked rebellion in Labour. More than half of the cabinet urged him to reconsider, instead urging tax increases or increased borrowing. Labour MPs Clive Lewis and Debbie Abrahams criticized the cuts as being unfair, while disability charities warned they would further embed poverty.
Mitigating measures and Starmer’s defense
To ease anxieties, Kendall launched policies such as exempting severely disabled individuals from reassessments, a five-year Universal Credit increase, and a £1 billion jobs support scheme. Starmer defended the cuts by stating that doing nothing was neither ethically nor economically viable.
Future implications
The cuts come ahead of Reeves’ spring statement, when additional spending reductions will be announced. Economists indicate that savings may still be needed to maintain Labour’s fiscal goals on target. Whether the reforms hold or prompt a broader Labour rebellion is unknown.
