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Labour faces a major challenge from its own backbenchers ahead of an announcement to restrict some sickness and disability benefits.

The plans are likely to be opposed by those in the party who are concerned about attempts to slash the ballooning welfare bill and encourage adults back to work.

Work and Pensions Secretary Liz Kendall is expected to set out the reforms on Tuesday, but details of where those cuts could fall is proving highly divisive within Labour.

Total welfare spending in 2023-23 was about £296bn, by the end of the decade it is forecast to reach almost £378bn.

Explainer: Where could welfare cuts be made?

The chancellor needs to find savings to meet her strict fiscal rules and Rachel Reeves has previously insisted “we do need to get a grip” on the welfare budget.

One proposal reportedly under consideration is to save around £5bn by freezing or tightening the rules around the personal independence payment (PIP).

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But Labour’s Mayor of Greater Manchester Andy Burnham, a former Labour health secretary, has “urged great caution on how changes are made” although, writing in The Times, he accepts “the benefits system needs a radical overhaul”.

“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,” he added.

Health Secretary Wes Streeting argued on Sunday Morning With Trevor Phillips that the current system is “unsustainable” and welfare reforms are needed. He also said mental health conditions are often overdiagnosed.

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‘1,000 people every day signing on to PIP benefits’

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

Campaigner Steve Morris is one of those 3.6 million PIP claimants and says freezing it at the current level would make his life much harder.

SN screengrab of campaigner Steve Morris - also deafblind - and a PIP claimant who's worried about reform to the benefit
Image:
Steve Morris claims PIP and is worried about what reforming the benefit could mean for him

“I’m deafblind. PIP makes a huge difference to my life. It enables me to, afford some of the additional costs that are associated with my disability.

“For so many disabled people benefits are a lifeline. So to hear that lifeline might be taken away or severely restricted is hugely concerning.”

Liz Kendall told The Sunday Times it was an “absolute principle” to protect welfare payments for people unable to work. “For those who absolutely cannot work, this is not about that,” she said.

But she said the number of people on PIP is set to more than double this decade, partly driven by younger people.

Read more from Sky News:
Streeting: NHS ‘addicted to overspending’
Teaching unions ready for fight over AI

Sky’s political correspondent Liz Bates said the government had been expected to announce a detailed plan over welfare spending last week.

“This particular issue of PIPs stopped that plan being announced because of the strength of backlash… from the backbenches all the way up to cabinet level.”

She added that talks were going on behind the scenes about whether the policy could be softened in some way, although it was unlikely reforms could be avoided completely ahead of the spring statement on 26 March.

“Could there be a bit of backtracking from Number 10 and from the department? This is what we’re going to find out on Tuesday. There is, of course, a lot of pressure coming from the chancellor.”

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Welfare system ‘letting people down’

Labour is also aiming to tackle economic inactivity – especially among those under 35 – with an increasing proportion out of work due to long-term sickness.

A recent PwC report warns “a significant proportion of working adults are close to becoming economically inactive” and ill-health “is a major driver”.

The poll of 4,000 people shows 10% of the workforce are currently actively considering leaving work, and not just their current role.

That rises to 37% of those aged 18-24, who say they have either seriously considered leaving work in the last year, or are actively considering doing so now.

While the factors are complex and vary by age, the report reflects mental health is a major concern with 42% of 18-24 year-olds citing it as the biggest reason to leave work.

File photo dated 21/11/06 of a patient in a wheelchair
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Backbench Labour MPs are concerned welfare reforms will harm vulnerable people claiming benefits. File pic: PA

On Sunday, Ms Kendall teased one policy announcement to attract people back to work, effectively giving disabled people the right to try employment without the risk of losing their benefits.

The so-called “right to try guarantee” aims to prevent those people who receive health-related benefits from having their entitlements automatically re-assessed if they enter employment.

The Conservatives support welfare reform but claim Labour is “divided” over the issue and “cannot deliver the decisive change we need”.

Shadow work and pensions secretary Helen Whately said: “The government’s dithering and delay is costing taxpayers millions every day and failing the people who rely on the welfare system.”

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

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

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.

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

BTC/USD, 1-year chart. Source: Cointelegraph

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

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

Asset performance post-Trump administration takeover. Source: Thomas Fahrer

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.

Related: Bitcoin experiencing ‘shakeout,’ not end of 4-year cycle: Analysts

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. 

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

Spot Bitcoin ETF net inflows. Source: Sosovalue 

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.

Related: Rising $219B stablecoin supply signals mid-bull cycle, not market top

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

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

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

<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.

Related: Tornado Cash dev Alexey Pertsev’s bail a ‘crucial step’ in getting fair trial, defense says

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. 

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

Source: Chris Pavlolvski 

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. 

Related: Free speech and online privacy: Pavel Durov’s rise to the top

“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

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

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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).

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Welfare reforms will ensure ‘trust in system’

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.

Read more:
Which benefits could be cut?

Why Labour MPs are so uncomfortable

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Why is there a surge in youth unemployment?

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.

👉 Tap here to listen to Electoral Dysfunction on your podcast app 👈

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.

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Will there be a backlash over benefits?

‘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.”

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