Latest news with #disabilitybenefits
BBC News
7 hours ago
- Health
- BBC News
Derbyshire pip claimants relieved but fearful after PM's U-turn
Sharon Arrowsmith, a Labour voter all her life, says she never thought she would have to "fear" the party in she says the government's plans to change who qualifies for certain disability and sickness benefits had left her "terrified". "I can't afford to lose a single penny", she says. "It's unconscionable."But early on Friday, the government confirmed a U-turn on its cuts to disability benefits in a bid to avert rebellion by more than 120 Labour backbenchers - leaving Sharon, from Derbyshire, breathing "a huge sigh of relief". The Universal Credit and Personal Independence Payment Bill was meant to tighten eligibility requirements for personal independence payments (pips), halve the health-related element of universal credit (UC), and increase the UC standard government hoped to save £5bn a year by 2030 with the bill, while slowing the increase in people claiming benefits. It was the changes to who qualifies for pips in particular that caused deep unhappiness amongst pip claimants will continue to receive what they currently get, as will recipients of the health element of universal credit. Planned cuts will only hit future well as changing who will be affected by the cuts, ministers are also expected to fast-track a £1bn support plan originally scheduled for many charities have rejected the Amo Raju, from the Derby-based charity Disability Direct, says the legislation should still be pulled."Welfare reform does need to happen, but it needs to involve disabled people in that decision-making process," he said."Let's pull it, get the right individuals around the table and co-produce the policy in the interests of disabled people." 'There's no fun' Ms Arrowsmith, from Amber Valley, has fibromyalgia, meaning she has difficulty moving about. It causes her chronic fatigue and joint and muscle pain. She struggles to do housework and shopping and often struggles to physically get out of 55-year-old also has other conditions including diabetes type 2, underactive thyroid, and growing cataracts which means she cannot drive and is reliant on autism diagnosis leaves her struggling with impairment of executive function and staying on had to stop working in January due to these conditions, and receives the mobility element of -ip, which is about £400 a month. She also receives universal credit, the vast majority of which is spent on private rent payments and bills. The pip payment used to help her employ someone to help with house tasks, but due to rising costs she says she is now heavily reliant on it to afford food after being left unable to work."I can't afford to lose a single penny. I would no longer be able to buy food or pay rent," she said."I have already cut everything down to the bone. There is no excess. There is no fun."Sharon thought she was likely to lose out because she will not score enough points in certain areas, like being able to wash and dress, which she can mostly manage. The government had been proposing that from November 2026, pip claimants would need to score at least four points from a single pip daily living activity to qualify for the daily living component of pip, as well as scoring a total of at least eight points. Sharon says she is relieved by the climbdown."I'm so proud of [the rebel MPs] for doing that, at the risk of their careers, having the courage to stand up. They are the real Labour people," she she says she worries for new claimants who will be impacted in the future."I am concerned still, I still think they really need to look at this bill and think about the people. Not the money, the people, that's what's important."I feel like I was wrong to vote Labour." Gordon Patten, from Long Eaton, is in his early fifties and is unable to work because of sarcoidosis, a rare condition impacting the lungs that means he must sleep with a machine aid. He also has been diagnosed with depression and type 2 diabetes and has had epilepsy since he was a receives roughly £460 a month through the daily living component of pip, which helps towards expenses such as the electricity bill his breathing aid machine leaves him with, which he says has increased, and hiring a cleaner to help with also receives the standard rate for mobility and is entitled to a mobility vehicle, an element which the government says will not be impacted by the changes. Gordon says he was glad to see the Labour backbenchers who disagree with the policy "standing up" to the prime minister."It is going to be a two-tier situation but we've had this in the past with disability allowance. You're always gonna have that, where people who started on a benefit get more," he he says the Labour Party have "mucked this up completely" for people like him."If you go back to 1945, at the beginning of the welfare state, it was a core [Labour] value"Labour has kind of lost its way with looking after the working person and the vulnerable...I honestly think that being in power has gone to their heads." A Department for Work and Pensions spokesperson said: "Ministers have repeatedly recognised how anxious people are when there is talk of reform which is why we will never compromise on protecting people who need our support."Our reforms will mean the social security system will always be there for those who will never be able to work."
Yahoo
9 hours ago
- Business
- Yahoo
UK govt climbs down on welfare cuts in latest U-turn
The UK government backed down Friday on controversial plans to slash disability and sickness benefits after a major rebellion by MPs, dealing a blow to Prime Minister Keir Starmer's authority. The climbdown is the third U-turn that Starmer has been forced into making in less than a month, leading to questions about his political acumen and the direction of the ruling Labour party. Only days after Starmer insisted he would plough ahead with the reforms, the government confirmed concessions had been made to 126 rebel MPs who had threatened to scupper the proposed changes. Tue turnaround comes just before Starmer marks the first anniversary of what has been a rocky return to power for Labour after 14 years in opposition to the Conservatives. He said that following "constructive discussion" with Labour rebels his welfare reforms now struck "the right balance". "We've got a package which I think will work, we can get it right," Starmer told broadcasters. The retreat means the Universal Credit and Personal Independence Payment (Pip) Bill, which contains the welfare reforms, will likely make it through a parliamentary vote due on Tuesday. "It's always best to concede and then get it through in some way, shape or form. This is sort of damage limitation," political scientist Steven Fielding told AFP. The concessions, due to be set out in parliament before Tuesday, include a "staggered approach" to the reforms, care minister Stephen Kinnock said. This means the narrower eligibility criteria proposed will only apply to new claimants, not those already receiving the benefit payments. Starmer's government had hoped to make savings of £5.0 billion ($6.9 billion) as a result of the changes, which have now been partly abandoned. That means finance minister Rachel Reeves will need to find the money elsewhere. - 'Unforced errors' - It has been a bumpy 12 months in office for Starmer during which Reeves has struggled to generate growth from a sluggish UK economy. On June 9, the government declared it had reversed a policy to scrap a winter heating benefit for millions of pensioners, following widespread criticism, including from its own MPs. Less than a week later Starmer -- a former chief state prosecutor in England and Wales -- announced a national inquiry focused on a UK child sex exploitation scandal that had attracted the attention of US billionaire Elon Musk. Starmer had previously resisted calls for an inquiry into the so-called "grooming gangs" that saw girls as young as 10 raped by groups of men, mostly of South Asian origin. He favoured a series of local probes. On Friday, the prime minister also backtracked on a speech given in May in which he warned that the UK was in danger of becoming an "island of strangers" without stricter immigration curbs. "That particular phrase -- no -- it wasn't right," he said in an interview with the Observer newspaper. "I'll give you the honest truth: I deeply regret using it," he added. The prime minister has a massive majority of 165 MPs, meaning he should be able to force whatever legislation he wants through parliament. But many of his own MPs complain of a disconnect between Starmer's leadership, which is focused on combatting the rise of the far-right Reform UK party, and Labour's traditional centre-left principles. "Labour is meant to stand for fairness, and those two flagship mistakes are all about being unfair," Fielding said of the winter fuel and the disability cuts. The rows have overshadowed Labour's tightening of employment rights and its investment in housing and green industries, he added. A YouGov poll of more than 10,000 Britons released this week found that while Labour is losing voters to Reform, it is also forfeiting supporters to the Liberal Democrats and the Greens on the left. "They've been making so many unforced errors," said Fielding, a politics professor at Nottingham University in central England. "I think there is now being a very reluctant recalibration of things." har-pdh-jwp/jj
The Guardian
20 hours ago
- Business
- The Guardian
The Guardian view on Labour's disability benefits rethink: concessions suggest strategy not a change of heart
The humbling of a prime minister by his own side is rarely an edifying spectacle, but it does at least suggest a pulse in the parliamentary system. Sir Keir Starmer has now staged three conspicuous retreats: over winter fuel payments, over grooming gangs and now – most perilously – over sweeping changes to disability benefits. Two of these reversals followed backbench unrest. This week's about-face on the government's flagship welfare bill looks less like a full U-turn than a partial climbdown designed to avert open rebellion. While Sir Keir has taken a step back over benefit changes, which affect the most vulnerable in society, the result resembles textbook damage control. The concessions, presented as a response to principled pressure, feel more like fallback options held in reserve for moments of internal disquiet. The first is that existing personal independence payment (Pip) claimants will be spared new, tighter assessments – at least for now. But about 430,000 new Pip claimants who would qualify under current rules still face being excluded when tougher criteria arrive in November 2026. The second is that the health element of universal credit will no longer be frozen for current recipients. But new claimants – many too unwell to work – will be placed on a reduced rate unless they meet a higher threshold. All Pip awards are periodically reassessed, implying that all recipients could eventually face the new scheme. The upshot is that existing claimants would be protected, but future ones face tougher rules. Two people with identical conditions could receive support, according to the Institute for Fiscal Studies, that differs by up to £6,560 a year – purely due to timing. This, we're told, is compassion. The savings – halved to £2.5bn a year – come by offloading the cost on to future claimants. MPs rightly fear this locks in a two-tier system that is deliberately harsher on disabled people. Older Labour MPs will remember denouncing this very playbook. A decade ago, Iain Duncan Smith pioneered a slow, procedural tightening of welfare – hitting new claimants first, then reassessing the rest – precisely to defuse resistance. Labour opposed it then. Today, it is governing by the same method. It feels out of step with a post-pandemic Britain grappling with a cost of living crisis. Many Labour MPs believe these are still the wrong reforms and will vote against the bill when it comes back to the House of Commons next week. Clearly, tightened eligibility and a two-tier system may exclude many who need support. If the government wants to raise money, it might ask a little more of those with the broadest shoulders – not those with mobility aids, care plans and the audacity to ask for a fair deal. If ministers truly believe they are acting decently, they should publish the impact assessment and be honest about the consequences. Perhaps the most telling lesson is not about policy detail, but about political temperament. Modern governments are always under pressure to appear fiscally restrained. Yet whether – or how – they choose to meet that pressure reveals what they value, and who they believe can be asked to bear the costs. The welfare state has always relied on consent, and on a basic sense of fairness. If a Labour government cannot convincingly defend that principle, it risks more than backbench unrest; it risks eroding the trust that makes reform, essential in any changing society, possible in the first place. Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here.
Daily Mail
21 hours ago
- Business
- Daily Mail
Tax hikes Reeves could impose after the £3bn benefits U-turn
Households are on alert for further potential tax hikes in autumn after Keir Starmer handed major concessions to rebels in a bid to salvage flagship legislation on health and disability benefits. On Friday, the government confirmed a U-turn on its cuts to disability benefits in order to avert a rebellion by more than 120 Labour backbenchers. The reversal leaves a £3billion hole in Chancellor Rachel Reeves ' financial plans, according to the Institute for Fiscal Studies. Meanwhile, the Resolution Foundation warned that tax rises may be needed for her to now meet her fiscal rules. The initial benefit reforms would have saved the government £5.5billion by the end of the Parliament. The planned cut to personal independence payments eligibility was set to raise the bulk of this saving, £4.5billion. However, according to the IFS, the revised package of reforms will save only £2.5billion, so will cost the government £3billion relative to their previous plans. Under the change in tack, people who currently receive personal independence payments (PIP), or the health element of universal credit, will continue to do so. Instead, planned cuts will now only hit future claimants. Liz Kendall, Secretary of State for Work and Pensions, said: 'We have listened to people, we are in a good place now'. Most economists and think tanks think tax rises in the Autumn Budget 2025 are now inevitable. Tom Waters, an associate director at IFS, said: 'These changes more than halve the saving of the package of reforms as a whole, making the Chancellor's already difficult Budget balancing act that much harder. 'The decision is to protect existing health-related benefit claimants from the reforms, thereby making the savings entirely from new claimants to these benefits. 'This will create big differences – thousands of pounds a year, for many years in some cases – between similar people with similar health conditions who happen to have applied at a slightly different time.' Samuel Mather-Holgate, an independent financial adviser at Mather and Murray Financial told Newspage: 'With Starmer doing more U-turns than someone doing the bleep test, taxes are going up. 'There's no way that other departments can mitigate these changes to their budget.' Which taxes could be increased? Reeves has ruled out taxes on the working people, including income tax , National Insurance for employees, VAT and corporation tax. Other taxes will be in her sights. Capital gains tax Higher capital gains tax could be one option for Reeves. Capital gains tax is levied on profits from assets ranging from shares to second homes, buy-to-let properties and personal possessions. The rates for stocks and shares gains were hiked in the 2024 Autumn Budget to 18 per cent for basic rate taxpayers and to 24 per cent for those paying higher rates of tax. The profits from assets like sharers tend to come from people taking a risk, whether an entrepreneurial one or an investment one, making capital gains tax a likely target for hikes. Inheritance tax Reeves could have inheritance tax in her sights again It is a growing money-spinner for the government, with the number of households falling in scope for it rising. In the 2024 Autumn Budget, Reeves capped the availability of Business Relief and Agricultural Relief, and halved the relief available on Alternative Investment Market shares. Reeves also unveiled plans to bring pensions into the scope of inheritance tax from 2027. Further tweaks and amendments could happen. Pensions Pensions are a major source of wealth for many people, making them a prime target for Reeves. Last year, while Reeves dragged unused pension assets into the inheritance tax net from April 2027, she did not go as far as some experts feared. That is not to say that she will not meddle with pensions later this year. HMRC recently announced a consultation on salary sacrifice - when people forgo a pay rise or bonus and add to their pension instead, which helps avoid higher marginal tax rates. It has prompted speculation that Reeves could introduce a cap on the amount of salary sacrifice people can use. There is also speculation about the reintroduction of the pensions lifetime allowance. The Chancellor could also look at reforming income tax relief on pension contributions. Tax thresholds freeze The freeze on certain tax thresholds since 2021 has created a huge stealth tax raid in recent years. The frozen basic rate threshold, currently £12,570, drags more people into paying income tax and means that the real value - adjusted for inflation - of the tax-free allowance has been diminished. Stalling the higher rate threshold at £50,270 has shifted more people and a greater slice of earnings into the 40 per cent bracket. John Woolfitt, a director at Atlantic Capital Markets, told Newspage: 'A "stealth tax" manoeuvre will be high on the cards. 'Income tax allowance and the higher-rate threshold currently rise with inflation . Freezing or delaying future increases effectively raises income tax, without officially having to announce a hike.' He added: 'Targeting high earners and wealth transfers could also be seen and a populist move as the government tries to sure up support from the broader electorate.' According to the Resolution Foundation, extending the freeze in personal tax threshold by one year will save £4billion a year, 'though further consolidation is likely to be needed in the Budget this Autumn.' Property Businesses Higher employer national insurance contributions are already hammering businesses across Britain. However, under growing pressure to boost the Treasury's coffers, Reeves could set her signs on corporation taxes, VAT exemptions or other duties. 'This would really impact the already fragile business confidence in the UK', Woolfitt said. Wealth tax Some campaigners believe Reeves should impose a wealth tax to boost the tax-take and quash inequality. Tax Justice UK is calling on more taxes for the super-rich to be introduced by the current Government. It wants to see a 2 per cent wealth tax on assets over £10million, which it says will raise up to £24 billion a year. It also wants to apply national insurance to investment income, close inheritance tax and non-dom loopholes, and introduce a 4 per cent tax on share buybacks. It remains unclear whether a wealth tax is on Reeves' agenda and how it would work in practice. An unprecedented 16,500 wealthy Britons are predicted to leave this year amid higher taxes and a gloomy economic outlook.
Daily Mail
a day ago
- Business
- Daily Mail
The tax hikes Rachel Reeves could impose to plug the benefits U-turn £3bn hole
Households are on alert for further potential tax hikes in autumn after Keir Starmer handed major concessions to rebels in a bid to salvage flagship legislation on health and disability benefits. On Friday, the government confirmed a U-turn on its cuts to disability benefits in order to avert a rebellion by more than 120 Labour backbenchers. The reversal leaves a £3billion hole in Chancellor Rachel Reeves' financial plans, according to the Institute for Fiscal Studies. Meanwhile, the Resolution Foundation warned that tax rises may be needed for her to now meet her fiscal rules. The initial benefit reforms would have saved the government £5.5billion by the end of the Parliament. The planned cut to personal independence payments eligibility was set to raise the bulk of this saving, £4.5billion. However, according to the IFS, the revised package of reforms will save only £2.5billion, so will cost the government £3billion relative to their previous plans. Under the change in tack, people who currently receive personal independence payments (PIP), or the health element of universal credit, will continue to do so. Instead, planned cuts will now only hit future claimants. Liz Kendall, Secretary of State for Work and Pensions, said: 'We have listened to people, we are in a good place now'. Most economists and think tanks think tax rises in the Autumn Budget 2025 are now inevitable. Tom Waters, an associate director at IFS, said: 'These changes more than halve the saving of the package of reforms as a whole, making the Chancellor's already difficult Budget balancing act that much harder. 'The decision is to protect existing health-related benefit claimants from the reforms, thereby making the savings entirely from new claimants to these benefits. 'This will create big differences – thousands of pounds a year, for many years in some cases – between similar people with similar health conditions who happen to have applied at a slightly different time.' Samuel Mather-Holgate, an independent financial adviser at Mather and Murray Financial told Newspage: 'With Starmer doing more U-turns than someone doing the bleep test, taxes are going up. 'There's no way that other departments can mitigate these changes to their budget.' Which taxes could be increased? Reeves has ruled out taxes on the working people, including income tax, National Insurance for employees, VAT and corporation tax. Other taxes will be in her sights. Capital gains tax Higher capital gains tax could be one option for Reeves. Capital gains tax is levied on profits from assets ranging from shares to second homes, buy-to-let properties and personal possessions. The rates for stocks and shares gains were hiked in the 2024 Autumn Budget to 18 per cent for basic rate taxpayers and to 24 per cent for those paying higher rates of tax. The profits from assets like sharers tend to come from people taking a risk, whether an entrepreneurial one or an investment one, making capital gains tax a likely target for hikes. Inheritance tax Reeves could have inheritance tax in her sights again It is a growing money-spinner for the government, with the number of households falling in scope for it rising. In the 2024 Autumn Budget, Reeves capped the availability of Business Relief and Agricultural Relief, and halved the relief available on Alternative Investment Market shares. Reeves also unveiled plans to bring pensions into the scope of inheritance tax from 2027. Further tweaks and amendments could happen. Pensions Pensions are a major source of wealth for many people, making them a prime target for Reeves. Last year, while Reeves dragged unused pension assets into the inheritance tax net from April 2027, she did not go as far as some experts feared. That is not to say that she will not meddle with pensions later this year. HMRC recently announced a consultation on salary sacrifice - when people forgo a pay rise or bonus and add to their pension instead, which helps avoid higher marginal tax rates. It has prompted speculation that Reeves could introduce a cap on the amount of salary sacrifice people can use. There is also speculation about the reintroduction of the pensions lifetime allowance. The Chancellor could also look at reforming income tax relief on pension contributions. Tax thresholds freeze The freeze on certain tax thresholds since 2021 has created a huge stealth tax raid in recent years. The frozen basic rate threshold, currently £12,570, drags more people into paying income tax and means that the real value - adjusted for inflation - of the tax-free allowance has been diminished. Stalling the higher rate threshold at £50,270 has shifted more people and a greater slice of earnings into the 40 per cent bracket. John Woolfitt, a director at Atlantic Capital Markets, told Newspage: 'A "stealth tax" manoeuvre will be high on the cards. 'Income tax allowance and the higher-rate threshold currently rise with inflation. Freezing or delaying future increases effectively raises income tax, without officially having to announce a hike.' He added: 'Targeting high earners and wealth transfers could also be seen and a populist move as the government tries to sure up support from the broader electorate.' According to the Resolution Foundation, extending the freeze in personal tax threshold by one year will save £4billion a year, 'though further consolidation is likely to be needed in the Budget this Autumn.' Property Further tax changes linked to buying and selling property could be introduced. Last year, Reeves introduced a 2 per cent increase to stamp duty for second home owners. Future stamp duty hikes could target owners of multiple properties or high-value property transactions. Businesses Higher employer national insurance contributions are already hammering businesses across Britain. However, under growing pressure to boost the Treasury's coffers, Reeves could set her signs on corporation taxes, VAT exemptions or other duties. 'This would really impact the already fragile business confidence in the UK', Woolfitt said. Wealth tax Some campaigners believe Reeves should impose a wealth tax to boost the tax-take and quash inequality. Tax Justice UK is calling on more taxes for the super-rich to be introduced by the current Government. It wants to see a 2 per cent wealth tax on assets over £10million, which it says will raise up to £24 billion a year. It also wants to apply national insurance to investment income, close inheritance tax and non-dom loopholes, and introduce a 4 per cent tax on share buybacks. It remains unclear whether a wealth tax is on Reeves' agenda and how it would work in practice. An unprecedented 16,500 wealthy Britons are predicted to leave this year amid higher taxes and a gloomy economic outlook.
