Labour's battle on benefits begins as rebels say crackdown will cause 'immense suffering'

18 March 2025, 13:10 | Updated: 18 March 2025, 14:36

The Government is facing a backlash from Labour MPs after it announced a huge shake-up to the country's benefits system.

Benefits system ‘unsustainable, indefensible, and unfair’, Keir Starmer tells Labour MPs | LBC

Work and Pensions Secretary Liz Kendall laid out moves to save around £5billion amid fears spiralling costs on benefits are 'unsustainable', telling MPs the current system is 'holding the country back.'

Labour MP Clive Lewis said the Government’s welfare reforms are set to cause “pain and difficulty” for millions of Britons, warning voters will not believe that “this is the kind of action that a Labour government takes”.

Former Labour shadow chancellor John McDonnell has argued the welfare cuts would result in “immense suffering”.

He asked the Work and Pensions Secretary in the House of Commons: "The reality is, trying to find up to £5 billion worth of cuts by manipulating, by changing the PIP rules, the criteria, will result in immense suffering, and we’ve seen it in the past, loss of life.

"So what monitoring, independent monitoring, will take place that will be reported to this House, and what threshold of suffering will it take to take an alternative route to supporting disabled people?”

It comes after Ms Kendal vowed to bring in a permanent above inflation rise to the standard allowance in universal credit for the first time ever; a £775 annual increase in cash terms by 2029/30 and a decisive step to tackle the perverse incentives in the system."

The minister added that the work capability assessment (WCA) is "not fit for purpose". This is the process used to assess universal credit claims. It will be scrapped in 2028.

Mr Kendall said: "The Tories ran down the value of the universal credit standard allowance. As a result, the health top-up is now worth double the standard allowance at more than £400 a month, and in 2017 they took away extra financial help for the group of people who could prepare for work.

"So we’re left with a binary assessment of can or can’t work, and a clear financial incentive to define yourself as incapable of work, something the OBR, IFS and others say is a likely factor driving people on to incapacity benefits.

"Today, we tackle this problem head on. We will legislate to rebalance the payments in universal credit from April next year, holding the value of the health top-up fixed in cash terms for existing claimants, and reducing it for new claimants, with an additional premium for people with severe lifelong conditions that mean that they will never work to give them the financial security they deserve."

Ms Kendall also confirmed the government will legislate for a “right to try”. This aimed at offering people claiming sickness benefits the chance to try out a new job, without immediately having their benefits cut.

She said: "We will do more by legislating for a right to try, guaranteeing that work, in and of itself, will never lead to a benefit reassessment, giving people the confidence to take the plunge and try work without the fear this will put their benefits at risk."

Meanwhile, those aged under 22 will no longer be able to claim the incapacity benefit top up to universal credit.

Universal credit claimants with severe, lifelong disabilities will not usually face benefits reassessments, the Work and Pensions Secretary pledged.

She told the Commons: "The Conservatives failed to switch reassessments back on after the pandemic so they're down by more than two-thirds, with face-to-face assessments going from seven in 10 to only one in 10.

"We will turn these reassessments back on at scale and shift the focus back to doing more face-to-face.

"And we will ensure they are recorded as standard to give confidence to claimants and taxpayers that they're being done properly."

Ms Kendall concluded her statement by saying the Department for Work and Pensions would be spending an extra £1bn on employment support.

Changes to Personal Independence Payment (PIP) - - the main disability benefit - could be the most controversial of all Ms Kendall's announcements.

Ms Kendall said the number of people claiming personal independence payments set to double this decade from two to 4.3 million. The growth in claims rising faster among young people, and mental health conditions, she said.

People will need to score a minimum of four points in one category to qualify for the daily living element of Pip. It t affect the mobility component of this benefit payment, but signals that eligibility for Pip is being tightened.

It comes as 2.8 million people remain out of work due to long-term sickness.

Ms Kendall concluded her statement by saying the Department for Work and Pensions would be spending an extra £1bn on employment support.

Changes to Personal Independence Payment (PIP) - - the main disability benefit - could be the most controversial of all Ms Kendall's announcements.

Ms Kendall said the number of people claiming personal independence payments set to double this decade from two to 4.3 million. The growth in claims rising faster among young people, and mental health conditions, she said.

People will need to score a minimum of four points in one category to qualify for the daily living element of Pip. It t affect the mobility component of this benefit payment, but signals that eligibility for Pip is being tightened.

It comes as 2.8 million people remain out of work due to long-term sickness.