PM faces pressure over benefits system shake-up

Sir Keir Starmer is facing increasing pressure as the government prepares to announce changes to the welfare system this week.

Work and Pensions Secretary Liz Kendall is to outline cost-cutting reforms on Tuesday aimed at saving money and getting more people back to work.

Ministers are looking at tightening the eligibility criteria for a key disability benefit - the Personal Independence Payments (PIP). But the BBC understands there will not be an inflation freeze on the payments, an idea initially proposed.

There is significant unease among Labour MPs about the welfare cuts, spreading far beyond Sir Keir's usual internal opponents. It is unclear as yet, though, whether that will harden into public opposition.

More than 3.6 million people currently claim PIP - which is designed to help compensate those with disabilities and long-term health conditions for higher living costs such as the purchase of a wheelchair or having to take more taxis to get around.

It had been initially reported that the government would consider not increasing PIP payments in life with inflation for a year. But that idea could be withdrawn after many usually loyal Labour MPs voiced strong opposition.

After attending a private meeting of Labour MPs last week, one MP told the BBC that freezing PIP would be "unforgivable".

"Some people have very complex disabilities. Part of the social contract is they are supported", they said.

Another MP, a usual supporter of the prime minister, told the BBC: "Most of us broadly agree that there are lots of people who don't work but should, and have no problem with getting them into work.

"But punishing those who are especially vulnerable and have severe disabilities is unacceptable."

Backbenchers have also expressed frustration at a lack of communication from ministers.

Speaking to the PA news agency, one Labour MP described "engagement sessions" held by No 10 as "a tick box exercise" and another said many colleagues had made it clear they would vote against such proposals.

The reason reform of the benefits system is being announced now is because the cuts form part of the Spring Statement on March 26.

Initially this was expected to be a pared-back parliamentary moment with Rachel Reeves only required to formally acknowledge new economic forecasts produced by the Office for Budget Responsibility (OBR).

Over recent weeks, however, it has become clear that the OBR has told Rachel Reeves that the £9.9 billion "headroom" she had at the time of her October Budget has since been wiped out by the rising cost of government borrowing – requiring savings. This was the buffer Reeves had against meeting her own borrowing rules.

There are some Labour MPs, including ministers, who believe that instead of responding by pursuing severe spending cuts, Reeves and Starmer should consider changing those rules so that the government can borrow more money, or increasing tax.

Reeves' allies, though, argue that this would spook the financial markets and result in the cost of borrowing going up even further, exacerbating the issues she is now trying to solve. On tax, the chancellor is constrained by commitments Labour made during the general election not to increase income tax or VAT.

The government is facing a towering disability welfare bill. Total spending on health and disability benefits is forecast to rise from £64.7bn in 2023-24 to £100.7bn in 2029-30.

The biggest contributor to this would be from welfare spending on working-age adults, according to the Office for Budget Responsibility.

PIP is the second-largest element of the working-age welfare bill, with spending on this projected to almost double to £34bn by 2029-30.

And claimant numbers, for PIP and Universal Credit payments, have increased significantly in the four years since the pandemic- about 37% over the past four years.

There are now about 4 million people getting at least one of the disability benefits - about 10% of the working age population, said Tom Waters from the Institute of Fiscal Studies.

Just under half of these claim for mental health problems, said the analyst, adding that "a majority of the increase" was from people claiming mental and behavioural problems as their main condition.

During his appearance on the BBC's Sunday with Laura Kuenssberg programme, Health Secretary Wes Streeting was asked if he agreed with experts that warn of an overdiagnosis of mental health conditions.

The health secretary said he wanted to "follow the evidence and I agree with that point about overdiagnosis".

"Here's the other thing, mental wellbeing, illness, it's a spectrum and I think definitely there's an overdiagnosis but there's too many people being written off," he said.

The health secretary's comments prompted the mental health charity Mind to warn it was important to be "extremely careful" with the language around diagnoses to avoid stigmatising people.

Streeting also said the government "wants to support people who need help the most, and we've got to make sure that there is a wide range of support and that everyone's playing their part."

Shadow Education Secretary Laura Trott accused the government of being "all over the place and divided" over welfare reform.

When asked if the Conservatives would back the welfare changes, she said her party supported the "principle of welfare reform" but "we're not clear on the plan".

The SNP has urged Prime Minister Sir Keir Starmer to scrap the "cuts to disabled people".

The party's Westminster leader Stephen Flynn said the Labour government had "boxed itself in with its Tory austerity rules" on public spending.

Speaking to BBC Radio 4's Westminster Hour, the chief executive of charity Citizen's Advice said the government was "pulling the quick and easy lever" by taking "money out of the system".

Dame Clare Moriarty also accused the government of "not having done all the work to make sure that people can actually be supported into work".

"If I was talking to Liz Kendall now, I'd be saying the way that they are going about this does not feel consistent with a government that really wants to raise living standards, tackle child poverty, end mass dependence on emergency food parcels.

"They really need to think about the consequences of taking this short term action."

Writing in the Times on Monday, Greater Manchester mayor Andy Burnham said he recognised the need for reform of the system, but urged "caution" on benefit changes.

He said: "It would trap too many people in poverty. And to be clear: there is no case in any scenario for cutting the support available to disabled people who are unable to work."