Campaigners and charities have raised concerns that Rachel Reeves will use a speech outlining Labour’s plans for economic growth on Wednesday to cut crucial benefits.
Writing in the Sun on Sunday, Reeves said she will be “looking closely at the rising cost of health and disability benefits”.
The Chancellor has made kickstarting the economy a flagship pledge of the Labour government, but has come under pressure in recent weeks amid concerns of lagging economic growth and a weakening jobs market.
Disability benefit recipients, charities and campaigners have told Yahoo News they are “terrified” by the prospect of cuts, with many already struggling on the amount they currently have.
Here’s what we know about Reeve’s speech so far — and what we’ve yet to find out.
What we know
The cost of the benefits bill has been under scrutiny since Labour came to power, with the government saying it is over budget by more than £8 billion and needs to reduce benefits payments.
It announced plans to look at reforming the disability benefits system last year, with a consultation outlining its proposed changes coming this spring.
The government has said that any proposed changes would be made by “putting the views and voices of disabled people at the heart of any policy changes that directly affect them”.
Labour’s concerns centre around the UK being the one country in the G7 — the countries with the seven largest and most advanced economies — where employment rates have not yet returned to pre-pandemic levels, reportedly resulting in more people claiming benefits.
While questions remain over the previous government’s handling of the COVID-19 pandemic — with an inquiry currently investigating how the government failed in its handling of the health crisis — it is clear the current administration wants to remove this label.
In her piece for the Sun, Reeves called out the Conservative government, claiming it neglected addressing the increasing benefits bill, leaving Labour to “pick up the pieces”.
“Just like with so many other problems when it comes to the public finances, the Conservatives turned a blind eye,” Rachel Reeves wrote in the Sun on Sunday.
In this chart above, we can see how the UK’s disability benefit spend compares to other OECD countries — defined as 38 different developed countries committed to democracy and the market economy.
It is clear that the spend does sit below the OECD average – with Norway sitting at the top of the table.
We also know how much the government spends on providing this type of benefit. The government’s disability benefits spend last year made up 12.2% of total welfare spending, at £39.1bn. This consisted of attendance allowance (£6.7bn), disability living allowance (£6.7bn), personal independence payments (£21.8bn), and devolved benefits (£4bn).
While disability benefits are being targeted in the statement, the government’s largest benefits spend is currently on the state pension, accounting for around £125bn (or 44% of the total welfare spend) in 2023-24.
The UK’s state pension bill is going to keep increasing. That’s partly due to the triple lock guarantee, which means that pensions increase by inflation, average earnings, or 2.5% (whichever is higher).
What we don’t know
While the statement is touted to take place on Wednesday — anyone can watch via parliamentlive.tv — the exact time is not yet known.
What we won’t know until the spring is how severe the cutbacks will be, and who will be affected.
The government’s plans to reduce benefits have been widely criticised, with charities, recipients and campaigners calling for the government to focus on the people behind the figures.
Disability equality charity Scope has urged the government to bear in mind that life costs a lot more for disabled people – on average over £1,000 more every month.
“Cutting benefits won’t solve those problems, it will just make it harder for disabled people to get into work,” James Taylor, executive director of strategy at the charity told Yahoo News.
“Our broken benefits system urgently needs fixing. But starting with an amount to save, rather than working with disabled people to make it better, will be a disaster.”
We also don’t know the exact date of the consultation, when more details will be revealed.
