Disability benefits freeze will not go ahead after Labour MP backlash

Published

1 day ago

March 17, 2025

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A freeze to disability benefits will not go ahead following pressure from Labour backbench MPs, Sky News understands.

The government had been looking at freezing the personal independence payment (PIP) next year so it did not rise with inflation as part of a drive to cut down the ballooning welfare budget.

However, following pressure from Labour backbenchers over the past week, this has now been taken off the table, Sky News understands.

The proposal had been set to save about £5bn as Chancellor Rachel Reeves searches for savings after losing £9.9bn of fiscal headroom (the amount she could increase spending or cut taxes without breaking her fiscal rules) since the October budget due to a poor economy and geopolitical events.

Politics latest: Minister plays down level of rebellion

PIP is a payment of up to £9,000 a year for people with long-term physical and mental health conditions and disabilities to help with extra living costs.

However, the government is expected to make qualifying for PIP more difficult when Work and Pensions Secretary Liz Kendall reveals plans on Tuesday.

Sky News’ deputy political editor Sam Coates, on the Politics At Sam and Anne’s podcast, said the Treasury is also expected to abolish the Work Capability Assessment, which determines whether someone is fit or not to work and to then receive disability payments.

The government has described the system as “dysfunctional” as those “not fit for work” do not receive employment support or further engagement after the assessment, which could lock them out of future work altogether.

Explainer: Which benefits could be cut?

Sir Keir Starmer has made cutting the welfare budget a key project as spending on sickness benefits soared to £65bn last year – a 25% increase since the year before the COVID pandemic – and is expected to rise to £100bn before the next general election in 2029.

The number of people in England and Wales claiming either sickness or disability benefit has soared from 2.8 million to about 4 million since 2019.

However, many Labour MPs are uncomfortable with cutting benefits for disabled people.

Ms Kendall had been expected to announce welfare cut plans last week but this was delayed by displeasure from backbenchers, with the government taking the unusual step of asking all 404 Labour MPs to attend “welfare roundtables” in Downing Street last week.

Greater Manchester’s Labour mayor, Andy Burnham – a former health secretary – agreed the benefits system “needs a radical overhaul” but wrote in The Times: “I would share concerns about changing support and eligibility to benefits while leaving the current top-down system broadly in place. It would trap too many people in poverty.”

Will government follow through on tough talk despite backbench concerns?

Mhari Aurora

Political correspondent

@MhariAurora

Tomorrow, the government will publish its plans to cut the welfare budget, but it’s the Labour benches that are likely to cause the most havoc.

This mini u-turn on freezing PIP will placate some Labour MPs nervous about the unintended consequences of the welfare crackdown and how it may affect disabled people.

On Sky News Breakfast today former Shadow Chancellor John McDonnell welcomed the news, and said he understood the pressures the Treasury was facing.

His muted tone could be an indication the government’s efforts to persuade backbenchers of the merits of the plan – by inviting them to Downing Street to speak their minds and be reassured the most vulnerable would be protected – is taking effect.

However, despite a relatively understanding tone from Mr McDonnell, he also warned Reeves’s plans may turn out to create more problems than it will solve in the long run.

Mr McDonnell accused the government of not understanding the world has changed, hinting the chancellor ought to follow Germany’s lead, break her fiscal rules and blame the policy pivot on unprecedented global events.

Greater Manchester mayor Andy Burnham also attacked the government’s plans to crack down on the benefits bill, but Treasury minister Emma Reynolds launched the fightback on Sky News Breakfast, insisting the government had a duty to reform the welfare system “according to our values”.

Reynolds argued there is dignity in work and that reforms were needed as “something has gone seriously wrong under the Tories”, arguing the cuts chime with Labour ideology.

And Health Secretary Wes Streeting – the self-proclaimed Tory whisperer – has hardened his rhetoric even further, claiming the over-diagnosing of mental health problems is in part to blame for the ballooning benefits bill.

This hardening of the government’s language is a clear attempt to talk tough, but will the government be able to follow through on the action the Treasury is desperate to see while many Labour backbenchers remain unconvinced Starmer has his priorities in the right order?

Treasury minister Emma Reynolds played down the level of discontent over plans to freeze PIP, as she told Sky News: “It is absolutely everyday business that we should have discussions with backbenchers, meetings between our MPs and ministers happen all day, every day.

“So this isn’t something that is any different, but we’re determined to strike the right balance here.”

She added there will “always be a safety net for the most vulnerable” and pointed out Labour created the welfare state in 1945, but it needs to be “more sustainable”.

Politics

Bitcoin beats global assets post-Trump election, despite BTC correction

Published

2 hours ago

March 18, 2025

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Bitcoin beats global assets post-Trump election, despite BTC correction

Bitcoin managed to outperform the other major global assets, such as the stock market, equities, treasuries and precious metals, despite the recent crypto market correction coinciding with the two-month debt suspension period in the United States.

Bitcoin’s (BTC) price is currently down 23% from its all-time high of over $109,000 recorded on Jan. 20, on the day of US President Donald Trump’s inauguration, Cointelegraph Markets Pro data shows.

Despite the recent decline, Bitcoin still outperformed all major global market segments, including the stock market, equities, US treasuries, real estate and precious metals, according to Bloomberg data shared by Thomas Fahrer, the co-founder of Apollo Sats.

“Even with the pullback, Bitcoin still outperforming every other asset post election,” wrote Fahrer in a March 18 X post.

Despite concerns over the premature arrival of the bear market cycle, Bitcoin’s retracement to $76,000 remains part of an organic “correction within a bull market,” according to Aurelie Barthere, principal research analyst at the Nansen crypto intelligence platform.

“We are still in a correction within a bull market: Stocks and crypto have realized and are pricing in a period of tariff uncertainty and fiscal cuts, no Fed put. Recession fears are popping up,” the analyst told Cointelegraph.

Bitcoin ETFs log biggest daily inflows since February

The US spot Bitcoin exchange-traded funds (ETFs) are starting to see positive net daily inflows, which may bring more upside momentum for the world’s first cryptocurrency.

The US Bitcoin ETFs recorded over $274 million worth of cumulative net inflows on March 17, marking the highest day of investments since Feb. 4, when Bitcoin was trading above $98,652, Sosovalue data shows.

ETF investments played a major role in Bitcoin’s 2024 rally, contributing approximately 75% of new investment as Bitcoin recaptured the $50,000 mark on Feb. 15.

While Bitcoin may see more downside volatility due to global trade war concerns, it is unlikely to see a significant decline below the current levels, according to Gracy Chen, CEO of Bitget.

Chen told Cointelegraph:

“I don’t see BTC falling below 70k, possibly $73k – $78k which is a solid time to enter for any buyers on the fence. In the next 1-2 years, BTC at $200k isn’t as far-fetched as most would think.”

Other industry leaders are also optimistic about Bitcoin’s price trajectory for the rest of 2025, with price predictions ranging from $160,000 to above $180,000.

Magazine: SCB tips $500K BTC, SEC delays Ether ETF options, and more: Hodler’s Digest, Feb. 23 – March 1

Politics

The case against Pavel Durov and why it’s important for crypto

Published

4 hours ago

March 18, 2025

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<div>The case against Pavel Durov and why it's important for crypto</div>

Telegram founder Pavel Durov has been allowed to leave France temporarily, but the preliminary charges against him raise significant questions for the crypto community.

On March 13, a French court gave the founder and CEO of the encrypted messaging app Telegram permission to leave for Dubai, where he had previously resided. Durov had been in France since August 2024, when he was arrested at the Le Bourget airport in Paris.

Durov was part of an investigation containing allegations of negligence and complicity in crimes like narcotics trafficking, money laundering, child sexual exploitation and terrorism. He could face up to 20 years in prison if convicted.

More broadly, Durov’s case raises questions about developer responsibility for the cryptographic platforms and tools they create — a well-known issue in the cryptocurrency industry.

Is Durov responsible for what happens on Telegram?

The preliminary charges against Durov claimed he was responsible, at least in part, for the illicit activities allegedly enabled by the platform’s encryption and support for cryptocurrencies.

The argument will sound familiar to crypto industry observers, who have been following the case of Alexey Pertsev, the developer of cryptocurrency mixer service Tornado Cash. As with Durov, prosecutors allege that Pertsev is responsible for the illicit activities that took place on the platform, namely money laundering.

Pertsev was arrested in the Netherlands in 2022 and is currently out on bail while he waits for his trial to begin.

In both cases, members of the crypto community have recognized the possible implications to free speech and privacy, and come to support the executives.

Jose Fabrega, head of marketing at Ethereum-based blockchain Metis, called Durov’s arrest the “Tornado Cash case all over again.”

The case against Pavel Durov and why it's important for crypto — *Source:* *Jose Fabrega*

Natalia Latka, director of public policy and regulatory affairs at blockchain analysis firm Merkle Science, has previously told Cointelegraph that “Historically, software developers were seen as neutral creators of tools and platforms, responsible for their technical functionality but not for how those tools were used.”

However, she said this has been changing with the proliferation of decentralized tools that “challenge traditional regulatory frameworks.”

This puts decentralized platforms in a “tight spot,” crypto platform Onesafe wrote in a blog post on March 17. “This means knowing the legal frameworks governing their operations and engaging with regulatory bodies.”

It also called the Durov case a “pivotal moment” for the cryptocurrency industry and called on crypto firms to advocate for more “balanced regulations” and support advocacy groups.

Durov himself wrote on March 17 that Telegram has “not only met but exceeded its legal obligations.”

Implications for free speech

Observers and critics alike have raised concerns about Durov’s arrest — discussing what it means for free speech and whether the arrest could have been politically motivated.

Chris Pavlovski, the CEO of “alt-tech” video-sharing platform Rumble, said that it was the final straw for him and his company, which had previously clashed with French officials over censorship issues.

Gregory Alburov, an investigator for the Anti-Corruption Foundation of late Russian opposition politician Alexey Navalny, said the case “in addition to being unjust as hell (Durov obviously isn’t engaged in terrorism or weapons trafficking), is also a huge blow to freedom of speech.”

Durov’s previous clashes with regulators, particularly in 2018, when he refused to comply with an order from Russian telecoms regulator Roskomnadzor, have led many to believe that the charges were politically motivated.

While French President Mannuel Macron publicly stated that the case is not an attack on Durov, Dmitry Zair-Bek — a human rights lawyer and head of the human rights organization Department One — disagrees.

“Durov is essentially being targeted for his efforts to protect users’ privacy and, of course, for his refusal to cooperate with intelligence agencies,” he said.

Regardless of the motivations, the outcome of the case will have clear implications for future platforms. A conviction could intimidate platforms and executives into more intense moderation to the point of censorship, while a victory could embolden others to abandon obligations to regulators and public safety.

Durov’s leave in Dubai reportedly extends to April 7. The French prosecutor’s office has not made any public statements regarding the status of the case.

Magazine: Crypto fans are obsessed with longevity and biohacking: Here’s why

Politics

Big benefits cuts are imminent – here’s what to expect and why it could be just the start

Published

4 hours ago

March 18, 2025

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Big benefits cuts are imminent - here's what to expect and why it could be just the start

Those with “milder mental health” issues and “lower-level physical conditions” could see their disability benefits cut, as the government looks to shave £6bn off the welfare bill.

Liz Kendall, the work and pensions secretary, is expected to target sickness and disability benefit payments for savings today, which comes ahead of the spring statement next Wednesday.

Politics latest: Welfare reforms ‘imminent’

Her welfare reform green paper will arrive after Downing Street insisted there is a “moral and an economic case for fixing our broken system”.

Government figures argue the rising sickness and disability bill, which has ballooned since the pandemic, is unsustainable and will “leave the welfare state losing legitimacy” in the eyes of the wider public if not dealt with.

The cuts come as the chancellor eyes a hole in the public finances on the back of lower than expected growth and rising borrowing costs, with the £9.9bn headroom she had at the budget in October now wiped out.

Rachel Reeves’ self-imposed fiscal rules mean day-to-day government spending must be covered by tax revenue by 2029-30, which leaves her needing billions of pounds in spending cuts (after ruling out further tax rises, her other option).

What changes should we expect?

Ms Kendall is expected to target personal independence payments (PIP) – one of the main forms of disability benefits for those with long-term illnesses or disabilities – amid a spike in claimants.

The PIP bill has grown from £13.7bn a year before the pandemic to £21.8bn in the current financial year, and is set to increase to £34.1bn by the end of the decade.

The number of people claiming this disability benefit is projected to more than double from two million to 4.3 million.

The work and pensions secretary will tell MPs that Labour will protect those who have a serious condition and can’t work, and the government’s rowed back from plans to freeze PIP payments after backlash from its backbench MPs.

These payments are now expected to rise in line with inflation, but the eligibility criteria will be tightened to whittle back the number of people eligible to claim.

One government figure told me it would result in some conditions – such as “milder mental health” or “lower-level physical conditions” – being ineligible for PIP.

But they stressed that those with more severe conditions and who are never going to be able to work would be protected and cared for.

The key principles driving reforms

The changes are likely to draw criticism from some MPs, though one senior Labour source said they didn’t think there would be any ministerial resignations over the benefit announcements.

Another Labour figure told me they would be “massively shocked” if there were resignations.

However, a number of Labour MPs have voiced their concerns, as has Greater Manchester Mayor Andy Burnham.

In a bid to assuage MPs, the work and pensions secretary is also expected to earmark £1bn of savings into employment support programmes as she frames the reforms around three clear principles.

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The first will be to prevent people from falling into long-term economic inactivity with a better support offer to get people back into work quickly.

The second will be to change the incentive systems to move people away from welfare dependency.

This could see Ms Kendall slash the highest level of incapacity benefit for working age people who have an illness or disability that limits their ability to work, while increasing the basic rate of support for those out of work (universal credit).

This is because the lower level of unemployment benefit has led to more people claiming for additional incapacity and disability benefits, while disincentivising them to try to find work.

The government will also announce a “right to try” scheme, allowing those on incapacity benefits to try returning to work without the risk of losing their benefits, as happens in the current system.

‘I don’t think they go far enough’

But with one in 10 working age people claiming sickness benefits, and one in eight young people not in education, employment or training, the reforms could be just the start of bigger changes – and potentially bigger political battles.

The cost of long-term sickness and disability benefits for working-age people has risen by about £20bn since the pandemic to about £48bn, and is forecast to hit almost £100bn by 2030.

“People are trapped on benefits and the bill is getting out of hand,” said one government figure.

“We are currently spending more than three times the annual policing bill on these benefits. It’s getting out of hand.

“I don’t think the reforms go far enough, and I don’t think people have clocked the size of the numbers going on here.”