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Plans for cuts to benefits which will impact more than three million households will be published today – as the government faces a battle to convince dozens of Labour MPs to back them.

Liz Kendall, the welfare secretary, has set out proposals to cut £5bn from the welfare budget – which she has said is “unsustainable” and “trapping people in welfare dependency”.

Disabled people claiming PIP, the personal independence payment which helps people – some of them working – with the increased costs of daily living, face having their awards reviewed from the end of next year.

An estimated 800,000 current and future PIP recipients will lose an average of £4,500 a year, according to a government assessment.

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Government’s battle over welfare reforms

The government also intends to freeze the health element of Universal Credit, claimed by more than two million people, at £97 a week during this parliament, and cut the rate to £50 for new claimants.

Under pressure from Labour MPs concerned particularly that changes to PIP will drive families into poverty, Ms Kendall will announce new protections in the bill today.

Sky News understands they include a 13-week transition period for those losing PIP; a higher rate of Universal Credit for people with the most serious conditions; and a commitment that disabled people who take a job will not immediately lose their benefits.

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Some 40 Labour MPs have signed a letter refusing to support the cuts; and dozens of others have concerns, including ministers.

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Benefits cuts explained

Ms Kendall is determined to press ahead, and has said the number of new PIP claimants has doubled since 2019 – at 34,000, up from 15,000.

Ministers say 90% of current claimants will not lose their benefits; and that many people will be better off – with the total welfare bill set to continue to rise over this parliament.

To keep the benefit, claimants must score a minimum of four points out of eight on one of the daily living criteria.

Ministers say claimants with the most serious conditions, who cannot work, will not face constant reassessments.

A £1bn programme is proposed, intended to give disabled people who can work tailored support to find jobs.

Some Labour MPs have angrily opposed the reforms – which will be voted on later this month.

Last night in a parliamentary debate, Labour MP for Poole Neil Duncan-Jordan disputed the Department for Work and Pensions (DWP) figures.

Read More:
Minister tells MPs controversial disability benefit reforms will go ahead
Big benefits cuts are imminent – here’s what to expect

He said: “We already know that PIP is an underclaimed benefit. The increase in claims is a symptom of declining public health and increased financial hardship disabled people are facing.

“We have the same proportion of people on working-age benefits as in 2015. This is not an economic necessity, it’s a political choice.”

Liz Kendall
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Liz Kendall

Rachael Maskell, Labour MP for York, called the proposals “devastating “. She said: “We must change direction and not proceed with these cuts.”

Disability groups say they fear an increase in suicides and mental health conditions.

The government’s own assessment forecast an extra 250,000 people could be pushed into poverty – including 50,000 children. It did not include the impact of people moving into work.

Ms Kendall was urged by MPs on the Commons Work and Pensions committee to delay the reforms, to carry out an impact assessment, but wrote back to the committee saying the reforms were too urgent to delay – and that MPs would be able to amend the legislation.

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Prediction markets bet on Coinbase-linked Hassett as top Fed pick

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Prediction markets bet on Coinbase-linked Hassett as top Fed pick

Prediction markets Polymarket and Kalshi view Kevin Hassett, US President Donald Trump’s National Economic Council director, as the favorite to replace Jerome Powell as the next Federal Reserve chair.

The odds of Hassett filling the seat have spiked to 66% on Polymarket and 74% on Kalshi at the time of writing. Hassett is widely viewed as crypto‑friendly thanks to his past role on Coinbase’s advisory council, a disclosed seven‑figure stake in the exchange and his leadership of the White House digital asset working group.​

Founder and CEO of Wyoming-based Custodia Bank, and a prominent advocate for crypto-friendly regulations, Caitlin Long, commented on X:

“If this comes true & Hassett does become Fed chairman, anti-#crypto people at the Fed who still hold positions of power will finally be out (well, most of them anyway). BIG changes will be coming to the Fed.”

Source: Polymarket Money

Related: Crypto-friendly Trump adviser Hassett top pick for Fed chair: Report

Kevin Hassett’s crypto credentials

Hassett is a long-time Republican policy economist who returned to Washington as Trump’s top economic adviser and has now emerged as the market-implied frontrunner to lead the Fed.

His financial disclosure reveals at least a seven‑figure Coinbase stake and compensation for serving on the exchange’s Academic and Regulatory Advisory Council, placing him unusually close to the crypto industry for a potential Fed chair.​

Still, crypto has been burned before by reading too much into “crypto‑literate” resumes. Gary Gensler arrived at the Securities and Exchange Commission with MIT blockchain courses under his belt, but went on to preside over a wave of high‑profile enforcement actions, some of which critics branded as “Operation Chokepoint 2.0.”

A Hassett-led Fed might be more open to experimentation and less reflexively hostile to bank‑crypto activity. Still, the institution’s mandate on financial stability means markets should not assume a one‑way bet on deregulation.​

Related: Caitlin Long’s crypto bank loses appeal over Fed master account

Supervision pushback inside the Fed

The Hassett odds have jumped just as the Fed’s own approach to bank supervision has received pushback from veterans like Fed Governor Michael Barr, who earned his reputation as one of Operation Chokepoint 2.0’s key architects.

According to Caitlin Long, while he Barr “was Vice Chairman of Supervision & Regulation he did Warren’s bidding,” and he “has made it clear he will oppose changes made by Trump & his appointees.”

On Nov. 18, the Fed released new Supervisory Operating Principles that shift examiners toward a “risk‑first” framework, directing staff to focus on material safety‑and‑soundness risks rather than procedural or documentation issues.

In a speech the same day, Barr warned that narrowing oversight, weakening ratings frameworks and making it harder to issue enforcement actions or matters requiring attention could leave supervisors slower to act on emerging risks, arguing that gutting those tools may repeat pre‑crisis mistakes.​

Days later, in Consumer Affairs Letter 25‑1, the Fed clarified that the new Supervisory Operating Principles do not apply to its Consumer Affairs supervision program (an area under Barr’s committee as a governor).

If prediction markets are right and a crypto‑friendly Hassett inherits this landscape, his Fed would not be writing on a blank slate but stepping into an institution already mid‑pivot on how hard (and where) it leans on banks.