LONDON — Plans to implement a freeze on the headline rates of Personal Independence Payment (PIP), a crucial disability benefit in the U.K., are expected to be abandoned following significant opposition from Labour MPs, according to sources familiar with the situation.
The Department for Work and Pensions (DWP) had been considering a proposal to postpone an inflation-linked increase for PIP, which assists approximately 3.6 million individuals with the costs associated with disabilities. This initiative was part of broader efforts aimed at reducing the welfare budget by £5-6 billion annually.
Significant political pushback
The suggestion to freeze PIP rates, which would necessitate primary legislation, faced immediate backlash when it was publicly leaked last week. Many MPs criticized the proposal both publicly and privately, voicing concerns over its implications for disabled constituents.
Two sources, who chose to remain anonymous to discuss ongoing policy developments, indicated on Friday that a freeze on PIP is unlikely to be included in the upcoming green paper on welfare reform expected next week. They advised that while the plans are not finalized by Prime Minister Keir Starmer’s Cabinet, they have evolved rapidly in recent days.
Despite the probable exclusion of a PIP freeze, the green paper is expected to recommend significant changes that may not sit well with campaigners and numerous Labour MPs. According to the sources, the document is likely to propose adjustments to the eligibility criteria for PIP, potentially making it more difficult for individuals to qualify, which could result in substantial savings for the government.
Ongoing discussions on welfare reform
The DWP spokesperson refrained from commenting on the specifics of the situation but emphasized the department’s responsibility to ensure that the welfare system is sustainable. They stated, “We have a duty to get the welfare bill on a more sustainable path and we will achieve that through meaningful, principled reforms rather than arbitrary cuts to spending.”
Many Labour MPs are in favor of welfare reform; however, there are concerns regarding the current system’s efficacy. Prime Minister Starmer addressed the issue, stating that the system is in a “worst of all worlds situation,” while Chancellor Rachel Reeves criticized the ineffective nature of the existing framework, asserting that it is failing both those who need support and the taxpayer.
The proposal for a blanket freeze on PIP had drawn interest within government circles due to its straightforwardness, which would allow for quick scoring by the Office for Budget Responsibility as a measure for public finance savings. Reeves is anticipated to present an update on government spending in her spring statement on March 26.
However, one insider noted that it has been difficult to reconcile a comprehensive freeze on PIP—with its independence from employment status—with the overarching goal of enabling more individuals to enter the workforce. Reports suggest that ministers expressed their apprehensions during a recent Cabinet meeting, and some MPs warned that resignations could follow if the freeze were enacted.
Labour MPs met with Downing Street officials this week, aiming to convey their concerns. One frontbencher remarked that they would not dismiss the possibility of resignations if the proposals were to proceed, indicating a deep sense of unease among colleagues regarding the government’s approach to welfare reform.