The disability benefit reforms statement issued by the welfare secretary, Liz Kendall alongside £5bn of cuts felt like Labour’s latest attempt to answer the question that seems to come up every time it tackles a thorny social policy issue and deliver bad news. Namely: how is this different from life under the Tories?
Kendall tried to accentuate the positive. Labour would fix the mess of a social security system it had inherited from the Conservatives, getting rid of perverse benefit incentives and toxic fit-for-work tests, and bring in more safeguards for vulnerable claimants. There would be increases to the basic rate of universal credit.
Unlike a year ago, when Rishi Sunak announced the Tories’ own proposals to cut the soaring disability benefits bill, Kendall was careful not to invoke culture war stereotypes. There was no suggestion that this was all the fault of snowflakes and benefit scroungers, or of mental health culture “going too far”.
Had reform of a system everyone knew was not working been the extent of the changes made by Labour, you suspect all would have gone well. Overshadowing it all, however, was Kendall’s confirmation of the bad news: a £5bn-a-year reduction in disability benefit spending by the end of the decade.
This shattering cut was just a single line in Kendall’s speech, crowded out by earnest promises to rescue disabled claimants from the benefits trap. But it will have big repercussions: financial ones for many claimants and political ones for ministers. We knew it was coming but it was a shock anyway. A Labour government, really?
Within minutes of Kendall sitting down, campaigners and backbenchers were delivering their verdict. Scope said Labour had just proposed the “biggest cuts to disability benefit on record” – dispiritingly, more severe than the ex-Tory chancellor George Osborne had attempted at the height of austerity.
Kendall’s challenge had been to square the circle between Labour’s competing ambitions: delivering social justice and tackling poverty on the one hand, and sticking to self-imposed fiscal restraints on the other. For all the talk of moral missions and unleashing claimant potential, it was not obvious she succeeded.
Disability charities called the plans “immoral and devastating”. The mental health charity Mind said they would exacerbate the mental health crisis. Child Poverty Action group said the reforms would undermine Labour’s child poverty strategy. Foodbanks said it would undermine Labour’s manifesto promises to cut food bank use.
Politically, it felt like a re-run of the corrosive internal Labour rows over the refusal to abolish the two-child benefit cap, or the withdrawal of the winter fuel payment. If campaigners had been relatively restrained in their criticism of government up to now – Labour had to be better than the last lot – it felt that accord was unravelling.
For some of the UK’s poorest citizens this will be the kind of brutal cut to incomes Labour has spent the last 14 years denouncing in opposition. Although existing claimants will be partly protected, between 800,000 and 1.2 million people on personal independence payments would lose support of between £4,200 and £6,300 a year by 2029-30, according to the Resolution Foundation thinktank.
The £3-a-week rise in the standard rate of universal credit was largely welcomed. It is hardly generous given that the pandemic uplift to universal credit was £20 a week but it at least recognised that much of the increase in disability claims in recent years has been from people unable to survive on the meagre level of general benefits.
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However, those increases will be accompanied by £47-a-week cuts to the incapacity element of universal credit for new claimants from 2026. If you are ill and disabled and under 22 you won’t be able to claim incapacity benefit at all. “The irony,” said Resolution’s Louise Murphy, “is that the main beneficiaries [of the plans] are those without health problems or a disability”.
It is not all bad news. The system reforms – redesigning the way people claim benefits and move on and off benefits, such as the “right to try” guarantee enabling claimants to test returning work without fear of losing benefits – shows a government that understands that poor benefit design is a bug not a feature.
How is this different from life under the Tories? The shadow welfare secretary, Helen Whately, was on hand to remind us that bleakness is relative. Why would you only reduce spending by a mere £5bn, she asked. “The fact is, £5bn just doesn’t cut it.” Things may be bad but under the last lot they could be a lot, lot worse.
