Welfare bill will now lift 50,000 out of poverty after changes, assessment finds
The prime minister was forced to abandon the central plank of his welfare bill – cuts to the personal independence payment (Pip) – to avert a big Labour rebellion in the House of Commons last week.
A new impact assessment by the Department for Work and Pensions has found the change will mean 50,000 fewer people, including children and working age individuals, are in relative poverty after housing costs in 2030.
The original government impact assessment on the proposed reforms found they would push an additional 250,000 into poverty, with some charities saying they calculated the figure to be higher.
This was amended to 150,000 people after the government made some initial concessions, including reversing some universal credit cuts and only applying the stricter Pip eligibility rules to new claimants, as it tried to quell a rebellion over the changes.
In the end, Keir Starmer shelved the main component of the cuts which were expected to save the government £5bn a year, and the Resolution Foundation estimates that the bill as it stands will bring no savings in five years' time.
The means the chancellor is facing a large financial black hole, and ministers have said this will come at a cost, with tax rises now predicted.
The chief secretary to the Treasury declined to rule out the introduction of a wealth tax when pressed on future tax rises in the Commons on Monday, and said any tax decisions would be set out by the chancellor at the autumn budget.
On Sunday, the education secretary, Bridget Phillipson, said the welfare U-turn may make scrapping the two-child benefit cap more difficult to achieve. 'The decisions that have been taken in the last week do make decisions, future decisions harder,' she said.
'But all of that said, we will look at this collectively in terms of all of the ways that we can lift children out of poverty.'
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