Ministers are braced for a ferocious Labour backlash today as billions of pounds of benefits cuts are finally unveiled.
Work and Pensions Secretary Liz Kendall is laying out moves to save around £5billion amid fears spiralling costs are ‘unsustainable’.
‘The social security system we inherited from the Conservatives is failing the very people it is supposed to help and holding our country back,’ Ms Kendall said. ‘Today we say ”no more”.’
Ms Kendall said the ‘complex and time-consuming’ work capability assessment element of Universal Credit is being scrapped from 2028. Everyone will be shifted to the Personal Independence Payment (PIP) assessment.
Eligibility is also being tightened for disability benefits, with ongoing checks ramped up.
Those with mental health complaints could also face more obligations to seek jobs, while disabled people will be incentivised to try work with guarantees they will not lose out if it proves impossible.
However, the idea of freezing PIP in cash terms has been ditched in the face of a mutiny on the Left.
And the initiative is only set to slow the alarming increase in overall health and disability benefits spending forecast for the coming years.
Ms Kendall said the measures were slated to save £5billion by 2029/2030, after £1billion is reinvested in support for work.
But that would still leave health and disability spending £15billion higher than this year.
The problem was underlined today as figures showed numbers receiving Personal Independence Payments (PIP) have risen 71 per cent over the past five years.
Keir Starmer has been hit with stubborn Labour resistance to the proposals before the formally announcement, with critics branding them ‘shameful’.
Cabinet signed off the long-awaited welfare package this morning before Ms Kendall made her statement to the House of Commons.
While the government has been making the ‘moral’ case for the overhaul, it could be critical for Rachel Reeves as she struggles to balance the books at the Spring Statement next week.
The Chancellor is thought to have a £15billion black hole to fill in the finances after economic growth slumped and debt interest costs spiked. She has ruled out more borrowing and significant tax rises, leaving spending cuts her only option.
However, the £5billion of savings is still swallowed by the wider rise in spending – which had been due to reach £100billion by the end of the decade.
Ms Kendall said the green paper sets out ‘decisive action’ to ‘fix the broken benefits system’.
The Work and Pensions Secretary said it would create ‘a more proactive, pro-work system for those who can work, and to be protected for those who cannot work now and for the long term’.
Ms Kendall continued: ‘Under this Government, the social security system will always be there for people in genuine need. That is a principle we will never compromise on.
‘But disabled people and people with health conditions who can work should have the same rights, choices and chances to work as everybody else.
‘That principle of equality is vital too, because far from what members opposite would have you believe, many sick and disabled people want to work with the right help and support, and unlike the Conservatives that is what we will deliver.’
Ms Kendall said nearly four million people are in work, despite having a work-limiting health condition, and 300,000 stop work ever year. Chances of people returning to work are five times higher within the first year of them being signed off.
Ms Kendall said the Government needed to do ‘far more’ to help people stay in work and get back to work. She cited giving statutory sick pay to the lowest-earning workers, and more rights to work from home would help people stay in jobs.
She said plans are being trialled for GPs to refer people to employment advisers rather than signing them off sick.
Ms Kendall said the Keep Britain Working review lead by former John Lewis boss Sir Charlie Mayfield will help establish what employers can do to keep people in work.
She said: ‘So we help more employers offer opportunities for disabled people, including through measures like reasonable adjustments, alongside our green paper consultation on reforming access to work so it is fit for the future.’
The biggest ticket item is thought to be limiting entitlements to PIP – which is not related to work status, but paid to support people with extra living costs due to their disability.
There are reports that people will need to show they have serious difficulty with everyday tasks such as washing, dressing and eating.
That could make it much harder for those with mental health issues to claim.
However, those with serious degenerative disabilities could be exempted from needing reassessments altogether.
Meanwhile, the work capability assessment for the incapacity element of Universal Credit could be replaced with a tougher system. The highest rates of those handouts could be reduced in real terms.
Many MPs believe around £1billion of the savings will be recycled into helping claimants get into work.
And there will be action to remove the perverse incentive against those on incapacity benefits trying work. Currently if a job proves impossible and has to be abandoned, people can go back to lower payments.
Official figures released today showed a total of 3.66million claimants in England and Wales were entitled to PIP as of January 31.
That was up 12 per cent from 3.27million in the same month a year earlier.
At the end of January 2020, before the pandemic, the figure was 2.14million.
It then rose to 2.36 million by the end of January 2021, 2.57 million by January 2022 and and 2.93 million by January 2023.
The current total of 3.66million is 71 per cent higher than the equivalent figure five years ago.
The most common disabling condition among those claiming PIP in England and Wales was psychiatric disorders, with 1.4million people in the category.
General musculoskeletal disease was cited for 691,000, neurological disease 467,000 and specific musculoskeletal disease 437,000.
Disabling conditions involving psychiatric disorders accounted for 38.4 per cent of claimants in January 2025, up from 35 per cent five years earlier.
General musculoskeletal disease accounted for 18.9 per cent, down from 20.6 per cent, and neurological disease accounted for 12.8 per cent, down from 14.4 per cent.
The proportion of PIP claimants under the age of 30 has spiked from 14.5 per cent of the total in January 2020 to 16.4 per cent in January 2025.
People aged 30-44 made up 18.8 per cent of the total for England and Wales in January 2020 and 20.9 per cent in January 2025.
By contrast, the proportion of claimants who are aged 45-59 has fallen from 36.3 per cent in January 2020 to 30.1 per cent in January 2025.
The figure for 60 to 74-year-olds is broadly unchanged, rising very slightly from 30.5 per cent to 30.9 per cent.
The Tories pledged to slash £12billion off the benefits bill before the election, although the figures they presented were hotly disputed.
Touring broadcast studios this morning, Cabinet Office minister Pat McFadden argued that the UK was the only major economy where inactivity had not fallen back to pre-Covid levels.
He confirmed reassessment reforms would be among the changes, and insisted that the Cabinet is ‘united’ around the need to trim costs.
Asked whether support for people with mental health conditions should be ‘time-limited’, Mr McFadden told Times Radio: ‘We do think it requires support, but we don’t think it renders people permanently… reassessments will be part of the package announced today.
‘We want people, if they’re on long-term sickness benefits, not to languish there forever, but to be reassessed.
‘There have been too few reassessments in recent years.’
Labour Greater Manchester mayor Andy Burnham warned yesterday that changes to eligibility and support while leaving the system as it is would ‘trap too many people in poverty’.
Speaking on BBC Newsnight, former frontbencher Baroness Chakrabarti suggested what she had been hearing about the contents of the green paper was ‘wrong in principle’.
She also laid into briefings about the proposals, insisting: ‘Shame on those people playing politics, those spin doctors and special advisors who’ve been playing this game at the expense of people’s mental health.’
Ms Kendall has sought to reassure MPs that the reforms would ensure ‘trust and fairness’ in the social security system and make sure benefits are available ‘for people who need it now, and for years to come’.
Ministers insist that reform is necessary, given the number of people in England and Wales claiming either sickness or disability benefit has soared from 2.8million to about 4million since 2019.
The Chancellor yesterday dismissed the idea of borrowing more to keep benefits the same as ‘not serious’.
‘Every day an additional 1,000 people are going on to Personal Independence Payments, disability benefits. That is not sustainable,’ she said.