Controversial plans to freeze some disability benefits may be dropped as ministers consider abandoning the plans to avoid a potentially damaging vote in the Commons.
Initial reports had suggested that Personal Independence Payments (PIP) would be frozen from rising in line with inflation for a year, but the plan has been met with strong opposition.
Work and Pensions Secretary Liz Kendall is set to lay out the reforms to our current welfare system next week, with the government expected to announce billions of pounds worth of cuts.
However, plans for the PIP not to rise in line with inflation for a year, could be dropped, as reported by the BBC.
It was one of several elements of a wider package to welfare cuts that are designed to save between £5bn and £6bn, but it has drawn the ire of several Labour MPs and peers.
It comes ahead of Chancellor Rachel Reeves spring statement on 26 March, where she is expected to reveal the full scale of the welfare spending reductions.
On Sunday it was announced disabled people will have the right to try employment without the risk of losing their benefits under plans set to be announced as part of the Government’s welfare reforms.
Ms Kendall is expected to announce legislation to introduce a “right to try guarantee” that will prevent people receiving health-related benefits from having their entitlements automatically re-assessed if they enter employment.
The move is said to be in response to surveys suggesting disabled people and those with long-term health conditions fear they will not get their benefits back if they try employment, but it does not work out.
MPs who have been supportive of welfare reform have told the BBC that they had received assurances that severely disabled people would not lose entitlement to benefits.
However, a vote to freeze PIP would likely highlight divisions within the party despite Ms Reeves arguing on Friday that the government needed to “get a grip” on the welfare bill.
In a tense cabinet meeting last Tuesday, several MPs had voiced their concerns about how Labour would be perceived if it created a system that made it more difficult for disabled and vulnerable people to receive their payments.
The eligibility to apply for PIP, which is intended to help with living costs for people with long-term physical disabilities or mental health, is also expected to tighten.
Speaking to the Observer, Ms Kendall said: “I know as a constituency MP for 14 long years under the Tories that there will always be some people who cannot work because of the severity of their disability or health condition,” she said. “Protecting people in genuine need is a principle Labour will never compromise on.”
However, she added that the system badly needed to be reformed to ensure people didn’t spend a lifetime on benefits, adding: “It’s terrible for the country too, as spending on the costs of failure soar. The sickness and disability bill for working age people has increased by £20bn since the pandemic, with a further £18bn rise to £70bn projected over the next five years.
“We must fix this broken system for the people who depend on it and the country as a whole.”
A Department for Work and Pensions spokesperson said: “We have been clear that the current welfare system is broken and needs reform, so that it helps long-term sick and disabled people who can work to find employment, ensuring people receive the support they need, while being fair to the taxpayer.
“Without reform more people will be locked out of jobs, despite many wanting to work. That is not just bad for the economy, it’s bad for people too.”
