Liz Kendall admitted changes are “never easy” today as she unveiled a massive £2.5 billion U-turn on Labour’s controversial welfare reforms – slashing expected savings in half after facing the threat of a crushing Commons rebellion.
The Work and Pensions Secretary stood before MPs insisting the Government still believes in “equality and social justice” while announcing concessions that will protect existing benefit claimants from the harshest cuts.
“The only way of unlocking the potential of individuals and of the country as a whole is when we collectively provide real opportunity and support,” Kendall told the Commons, striking a notably softer tone than her hardline March announcement.
No Two-Tier System, Kendall Insists
Shutting down accusations of creating a “two-tier” welfare system, Kendall outlined Labour’s revised “four-point requirement” for new benefits claimants – though existing recipients will be largely protected from the changes.
“Our benefit system often protects existing claimants from new rates or new rules because lives have been built around that support and it’s often very hard for people to adjust,” she explained.
Kendall pointed to historical precedents: “Some people still receive the Severe Disablement Allowance, which was closed to new claims in 2001. Many people are still on DLA, which replaced Pip in 2013.”
So we believe protecting existing claimants whilst beginning to focus Pip on those with higher needs for new claimants going forward, would strike the right and fair balance.
Key Concession: Benefits to Rise with Inflation
In her biggest climbdown, Kendall confirmed that vulnerable groups would be protected from real-terms cuts. I can today confirm that we will ensure for these groups the combined value of the Universal credit standard allowance and the health top up will rise at least in line with inflation,” she announced.
This protection will apply to existing claimants, those with severe lifelong health conditions, and people at the end of life – “protecting their incomes from these benefits in real terms every year for the rest of this Parliament.
The minister assured MPs: “Together with the changes to our proposals for Pip, this will ensure no existing claimants are put into poverty as a result of the changes in this bill.”
£300m Employment Support Package
Alongside the concessions, Kendall announced £300 million in new employment support funding and gave assurances that no existing benefits claimants would lose their Personal Independence Payment (PIP).
The scale of the challenge remains stark. Kendall told MPs that the system Labour inherited “is failing on all these fronts.
“It incentivises people to define themselves as incapable of work, just to be able to afford to live. It then writes them off and denies them any help or support,” she said.
The numbers paint a grim picture: 2.8 million Britons are out of work due to long-term sickness, with almost a million young people not in education, employment or training – “a staggering one in eight of all our young people.”
Future ‘At Risk’ Without Reform
Warning that the system’s sustainability has been “put at risk,” Kendall noted that the number of people on PIP payments is set to “double this decade” to more than four million.
But today’s concessions mark a significant retreat from March’s hardline announcement, when Kendall unveiled plans expected to save £5 billion by 2030. With the £2.5 billion cost of today’s U-turns, those savings have been cut in half.
The climbdown comes after more than 100 Labour MPs threatened to rebel, with some warning the original plans would push 250,000 people into poverty.
Kendall insisted the reformed system would be “fit for the future” as Labour has “listened carefully” to concerns. But with dozens of backbenchers still unhappy and a Commons vote looming, the Government’s welfare battle is far from over.
As one Labour MP put it after the statement: “She’s bought herself some breathing room, but at what cost? We’re still asking the poorest to pay for economic failure they didn’t cause.”
Image credit:
Liz Kendall – Official Cabinet Portrait, July 2024. Photo by UK Government, via Wikimedia Commons, licensed under the Open Government Licence v3.0 (OGL).
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