As Labour prepares to unveil its Spring Statement on 26 March, concerns are growing over potential £5 billion cuts to welfare spending. The Department for Work and Pensions (DWP) is expected to release a Green Paper outlining significant changes, particularly targeting health and disability benefits.
Experts and charities are warning that these reforms could push vulnerable people into poverty, as half of those receiving health-related Universal Credit already struggle to afford essentials. With the government aiming to reduce spending, many are anxious about what lies ahead.
What Welfare Changes Are Being Proposed?
Labour is looking to reform the Work Capability Assessment (WCA)—a key test used to determine if individuals are fit for work or need additional Universal Credit support.
Key Proposed Changes:
- £1.3 billion in annual savings through WCA reforms.
- Stricter eligibility criteria, which could lead to 400,000 fewer people qualifying for support.
- A re-consultation on WCA reforms, after the previous government’s plans were ruled “unfair” and “misleading” by the High Court.
- Possible reforms to Personal Independence Payment (PIP), although Labour has not confirmed details.
These changes could mean fewer people qualifying for health-related Universal Credit or Personal Independence Payment (PIP), which helps with extra living costs for those with long-term conditions or disabilities.
Why Is Labour Cutting Welfare Spending?
Government spending on health and disability benefits has soared from £65 billion before the pandemic to a projected £100 billion by the next election. Labour argues that:
- The current welfare system is failing both taxpayers and claimants.
- More people need support to stay in work rather than long-term reliance on benefits.
- The growing number of claims is not just a lifestyle choice, as some critics suggest, but also linked to factors like an aging population and rising health problems.
However, critics warn that cutting benefits without improving health services, job support, and fairer assessments could worsen financial hardship for vulnerable groups.
Concerns from Experts and Charities
Several organizations, including the Joseph Rowntree Foundation (JRF) and the Resolution Foundation, have warned that Labour’s approach must not harm disabled people’s living standards.
Key Statistics on Health-Related Universal Credit Recipients:
- 50% struggle to afford essentials, compared to 11% of non-benefit households.
- 24% used food banks last year, compared to just 3% of the general population.
- 30% of the increase in incapacity benefits from 2018-2023 was due to changes in the State Pension age and legacy benefits—not just rising claims.
Experts argue that simply cutting benefits won’t fix the root issues. Instead, they recommend:
- Better support for people with health conditions to stay in work.
- More frequent PIP assessments to ensure fair access.
- A long-term approach rather than short-term savings.
Will Personal Independence Payment (PIP) Be Affected?
While Labour has not confirmed any major PIP changes, they haven’t ruled out reforms either. The previous government had considered:
- Means-testing PIP (which could reduce payments for those with savings).
- Replacing cash payments with vouchers for specific expenses.
- Lowering payment rates to cut costs.
Although analysts warn against these changes, Labour might explore other ways to reform PIP assessments without drastically reducing support.
Labour’s welfare reforms aim to reduce rising costs, but they could leave many vulnerable people worse off. While changes to the Work Capability Assessment (WCA) and PIP eligibility are expected, experts urge a balanced approach that supports work participation without cutting essential benefits.
As the 26 March Spring Statement approaches, many will be watching closely to see whether these reforms provide fair solutions or simply shift financial burdens onto those least able to afford them.
FAQ’s
What changes is Labour planning for UK benefits?
Labour is planning welfare reforms, including stricter Work Capability Assessment (WCA) rules, which could remove 400,000 people from health-related Universal Credit.
Will Personal Independence Payment (PIP) be affected by Labour’s welfare reforms?
Labour has not confirmed PIP cuts but has not ruled out changes. Analysts warn against means-testing or replacing payments with vouchers.
Why is Labour cutting welfare spending?
Government spending on disability and incapacity benefits is rising towards £100bn. Labour argues that reforming assessments will help people stay in work while saving costs.
How many people could lose benefits under Labour’s reforms?
DWP analysis suggests 400,000 fewer people would qualify for support under proposed WCA changes, though Labour plans to reconsult on the reforms.
How are charities responding to Labour’s welfare plans?
Organizations like the Joseph Rowntree Foundation warn that cuts could worsen poverty. Experts suggest focusing on long-term improvements rather than short-term savings.
