Disability benefit cuts could plunge 700,000 households into poverty, Labour warned

Disability benefit cuts would be “catastrophic” and could push a further 700,000 disabled households into poverty, charities have warned the government.

Following reports that Labour is planning to slash billions from the welfare bill, an open letter from 16 leading charities to chancellor Rachel Reeves says the impact would be “devastating”.

It argues that disability benefits such as personal independence payment (PIP) and the limited capability for work element of universal credit are a “lifeline” for disabled people.

• Millions of universal credit and disability benefit claimants turn to food banks: ‘I’m terrified of cuts’
• DWP reveals new plans to get sick and disabled people into work ahead of benefit cuts
• Slashing billions from welfare will not help people into work or save money, Rachel Reeves warned

However, Keir Starmer reportedly told MPs that Britain’s benefits system is the “worst of all worlds”, with the numbers of people out of work or training “indefensible and unfair”.

The charities – including Scope, Citizens Advice, Mind, the Joseph Rowntree Foundation and Trussell – point out that PIP is not an out of work benefit but instead can enable people to work.

This is because PIP is intended to cover the extra costs of having a health condition – such as medical equipment or needing to keep a home warm. It alleviates financial pressures and helps disabled people live healthy lives, making them more likely to be in a position to look for work.

“Life costs more for disabled people. Huge numbers already live in poverty as a result of these extra costs. The impact of any disability benefit cuts would be devastating,” the letter reads.

“We agree with the government’s ambition to support more disabled people into work. However, making cuts to disability benefits will not achieve this goal or fix the system. In fact, there is little evidence to suggest cutting benefits increases employment outcomes.”

The Big Issue has reported extensively on the disability benefits system and the potential impact of cuts, which are likely to put greater pressure on the NHS, councils, social care, housing and other support services. 

Poverty already costs the government tens of billions of pounds every year, and analysis from Scope suggests that 700,000 more disabled households could be pushed into poverty without PIP.

James Taylor, executive director of strategy and social change at disability equality charity Scope, said:  “For many disabled people disability benefits can be the difference to be able to get by in life. If brought forward, these cuts would not only take away a vital lifeline but would also be a monumental setback in building an equal future.”

There are around 2.8 million people out of work due to long-term sickness. Spending on disability and for working-age people is up by £19bn in real terms since 2019-2020, and it is set to rise by £13bn by 2029-2030.

Consequently, the government has targeted disability benefits as an area it can make cuts.

A Department for Work and Pensions (DWP) spokesperson said: “Millions of people have been trapped out of work which is why we’re bringing forward reforms to health and disability benefits in the spring, so sick and disabled people are genuinely supported back into work, while being fairer on the taxpayer.”

The DWP has pledged to invest £240m on the biggest employment reforms in a generation”, with proposals to empower mayors to tackle inactivity, an overhaul of Jobcentres so they focus on skills and careers, and a youth guarantee to ensure young people are either earning or learning.

Big Issue understands that the DWP is planning to publish its green paper on welfare next week, which will set out more details of its plans for the health and disability benefits system.

Although the plans for increased employment support have been broadly welcomed, charities have repeatedly stressed that cuts will have the adverse impact of pushing people further away from work by worsening their physical and mental health.

The open letter warns the chancellor: “We know the benefits system is broken and needs reform. That there are disabled people out of work who want to work given the right support. And for some disabled people work isn’t appropriate. Changes to welfare must start here. Not with cuts.

“The government has an opportunity to work with disabled people and the sector to bring about meaningful change. We want disabled people to be heard and supported by the government. The needs and voices of the disability community should be at the heart of the government’s plans.”

Other charities which have signed the letter are Turn2us, Mencap, Sense, Z2K, Parkinsons UK, MS Society, Disability Rights UK, Thomas Pocklington Trust, National Autistic Society, RNIB and Inclusion Barnet.

“Disabled people should not be an afterthought,” the charities stressed. “We would urge you to safeguard disability benefits from cuts. We fear the cost of cuts is too great.”

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