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.
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.
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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.
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1:13
Will there be a backlash over benefits?
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.
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0:45
Streeting defends wanting to slash welfare benefits
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?
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?
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3:01
Labour faces criticism over welfare reforms
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”.
Reform UK has hit back at both the Archbishop of York and the government following criticism of its immigration policies.
Leader Nigel Farage announced the party’s flagship immigration plan during a flashy news conference held at an aircraft hangar in Oxford on Tuesday.
The party pledged to deport anybody who comes to the UK illegally, regardless of whether they might come to harm, and said it would pay countries with questionable human rights records – such as Afghanistan – to take people back.
It also said it would leave numerous international agreements, and revoke the Human Rights Act, in order to do this.
The policy was criticised by the Conservatives, who said Mr Farage was “copying our homework”, while parties such as the Liberal Democrats and the Greens condemned it.
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Image: Archbishop Stephen Cottrell and Richard Tice MP. Pics: PA
But the plan came under fire from an altogether different angle on Saturday, when the Archbishop of York accused it of being an “isolationist, short-term kneejerk” approach, with no “long-term solutions”.
Stephen Cottrell, who is the acting head of the Church of England, told Sunday Morning With Trevor Phillips that he had “every sympathy” with those who find the issue of immigration tricky. But he said Reform UK’s plan does “nothing to address the issue of what brings people to this country”, and would in fact, make “the problem worse”.
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10:50
In full: Richard Tice on Sunday Morning With Trevor Phillips
Speaking on the same programme, Richard Tice, Reform’s deputy leader, responded to the archbishop’s criticisms, saying that “all of it is wrong”.
The MP for Boston and Skegness said he was a Christian who “enjoys” the church – but that the “role of the archbishop is not actually to interfere with international migration policies”.
Mr Tice then turned his fire on the government, accusing ministers of being “more interested in protecting the rights of people who’ve come here illegally… than looking after the rights of British citizens”.
He accused ministers of having “abandoned” their duty of “looking after the interests of British citizens”.
Mr Tice reaffirmed his party’s policy that the UK should leave the European Convention on Human Rights (ECHR), calling it a “70-year-old, out-of-date, unfit-for-purpose agreement”.
The Reform UK deputy leader also:
• Defended plans to pay the Taliban to take migrants back, comparing it to doing business deals with “people you don’t like”
• Said the Royal Navy should be deployed in the English Channel as a “deterrent”, but added: “We’re not saying sink the boats”
• Urged the government to call an early general election
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18:09
Farage ‘wants to provoke anger’
Meanwhile, Bridget Phillipson, the education secretary, told Sky News that Reform “want to provoke anger, but they don’t actually want to solve the problems that we face in front of us”.
She told Sunday Morning With Trevor Phillips the UK had a “proud tradition [of] supporting those facing persecution”.
But she added: “We will make sure that people who have no right to be in this country are removed from this country. That’s right. It’s what people expect. It’s what this government will deliver.”
Ms Phillipson also insisted there “needs to be reform of the ECHR” and said the home secretary is “looking at the article eight provisions”, which cover the right to a private and family life, to see “whether they need updating and reforming for the modern age”.
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However, she refused to say what the government would do if it is found that the ECHR is unreformable. Instead, she defended Labour’s position of staying in the governance of the convention, saying that honouring the “rule of law” is important.
She added: “Our standing in the world matters if we want to strike trade deals with countries. We need to be a country that’s taken seriously. We need to be a country that honours our obligations and honours the rule of law.”
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1:15:33
Sunday Morning With Trevor Phillips
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1:35
Asylum seekers to remain at Bell Hotel
Ms Phillipson was also drawn on the recent court ruling in favour of the Home Office, which overturned an injunction banning The Bell Hotel in Epping from housing asylum seekers.
Challenged on whether the government is prioritising the rights of asylum seekers over British citizens, she said it “is about a balance of rights”.
The cabinet minister also repeated the government’s plans to end the use of hotels to house asylum seekers by 2029.
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7:08
‘We should have overruled law’
Shadow Cabinet Office minister Alex Burghart said the Conservatives would be willing to leave the ECHR – if this route is recommended to them.
The Tories have asked a senior judge to look into the “legal intricacies” of leaving the convention, which he said is “not straightforward”. He said when the party receives that report, it will then make a decision.
Challenged on whether the Tories will leave if that is what the report recommends, he added: “If that’s what’s necessary, we will do it.”
Mr Burghart also said he believed the previous Conservative government’s biggest mistake was that “we did not go far enough on overruling human rights legislation”, which prevented it from “taking the tough action that was absolutely necessary”.
But he added the Conservatives have now “put forward very clear legislation that would solve this problem” – though he concluded Labour “isn’t going to do it” so the problem “is going to get worse”.
The Archbishop of York has told Sky News the UK should resist Reform’s “kneejerk” plan for the mass deportation of migrants, telling Nigel Farage he is not offering any “long-term solution”.
Stephen Cottrell said in an interview with Trevor Phillips he has “every sympathy” with people who are concerned about asylum seekers coming to the country illegally.
But he criticised the plan announced by Reform on Tuesday to deport 600,000 people, which would be enabled by striking deals with the Taliban and Iran, saying it will not “solve the problem”.
Mr Cottrell is currently acting head of the Church of England while a new Archbishop of Canterbury is chosen.
Image: Pic: Jacob King/PA Wire
Image: The Archbishop of York, Stephen Cottrell in 2020.
File pic: PA
Phillips asked him: “What’s your response to the people who are saying the policy should be ‘you land here, unlawfully, you get locked up and you get deported straight away. No ifs, no buts’?”
Mr Cottrell said he would tell them “you haven’t solved the problem”, adding: “You’ve just put it somewhere else and you’ve done nothing to address the issue of what brings people to this country.
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“And so if you think that’s the answer, you will discover in due course that all you have done is made the problem worse.
“Don’t misunderstand me, I have every sympathy with those who find this difficult, every sympathy – as I do with those living in poverty.
“But… we should actively resist the kind of isolationist, short term kneejerk ‘send them home’.”
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2:04
What do public make of Reform’s plans?
Image: Nigel Farage at the launch of Reform UK’s plan to deport asylum seekers. Pic: PA
Asked if that was his message to the Reform leader, he said: “Well, it is. I mean, Mr Farage is saying the things he’s saying, but he is not offering any long-term solution to the big issues which are convulsing our world, which lead to this. And, I see no other way.”
Mr Farage, the MP for Clacton, was asked at a news conference this week what he would say if Christian leaders opposed his plan.
“Whoever the Christian leaders are at any given point in time, I think over the last decades, quite a few of them have been rather out of touch, perhaps with their own flock,” he said.
“We believe that what we’re offering is right and proper, and we believe for a political party that was founded around the slogan of family, community, country that we are doing right by all of those things, with these plans we put forward today.”
Sky News has approached Mr Farage for comment.
Farage won’t be greeting this as good news of the gospel – nor will govt ministers
When Tony Blair’s spin doctor Alastair Campbell told journalists that “We don’t do God”, many took it as a statement of ideology.
In fact it was the caution of a canny operator who knows that the most dangerous opponent in politics is a religious leader licensed to challenge your very morality.
Stephen Cottrell, the Archbishop of York, currently the effective head of the worldwide Anglican communion, could not have been clearer in his denunciation of what he calls the Reform party’s “isolationist, short term, kneejerk ‘send them home'” approach to asylum and immigration.
I sense that having ruled himself out of the race for next Archbishop of Canterbury, Reverend Cottrell feels free to preach a liberal doctrine.
Unusually, in our interview he pinpoints a political leader as, in effect, failing to demonstrate Christian charity.
Nigel Farage, who describes himself as a practising Christian, won’t be greeting this as the good news of the gospel.
But government ministers will also be feeling nervous.
Battered for allowing record numbers of cross- Channel migrants, and facing legal battles on asylum hotels that may go all the way to the Supreme Court, Labour has tried to head off the Reform challenge with tougher language on border control.
The last thing the prime minister needs right now is to make an enemy of the Almighty – or at least of his representatives on Earth.