UK ministers to drop plan to freeze key disability benefit

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Ministers are set to drop plans to freeze a major disability benefit next year in an attempt to quell a growing rebellion by Labour MPs over the UK government’s wider package of reforms to the welfare system.

Work and pensions secretary Liz Kendall had been considering a plan not to increase personal independent payments (PIPs) in line with inflation in April 2026 as part of a bid to curb benefits spending.

But government figures said the proposal was no longer expected after complaints from dozens of Labour MPs.

Kendall will, however, push ahead with broader reforms to welfare, including tighter eligibility criteria for PIP claimants, when she sets out on Tuesday a contentious package of measures designed to slash government outlays on health-related benefits.

The measures, to be set out in a Health and Disability green paper, are designed to curb total spending on health and disability benefits, which is forecast to rise from £64.7bn in 2023-24 to £100.7bn by 2029-30.

Chancellor Rachel Reeves said on Friday that the government “must get a grip” on the “broken” benefits system, echoing Prime Minister Sir Keir Starmer’s assessment of the system as “broken” and “indefensible”.

But the plan has already prompted deep disquiet among some charities and many Labour MPs, who fear the impact of the measures on some of the most vulnerable people in society.

Concerns about the package were raised by senior ministers at an unusually heated cabinet meeting on Tuesday. 

Under the reforms, Kendall is expected to cut the top rate of incapacity benefit. People deemed unfit for work are paid more than £800 a month at present, double the figure for jobseekers. She is also expected to increase the basic rate of support for people out of work, known as universal credit. 

Experts have long argued that the low level of unemployment benefit has driven more people with underlying health conditions to claim for additional incapacity and disability benefits. 

The National Institute of Economic and Social Research said last week that universal credit had not covered the cost of essentials for more than 14 years, apart from a brief period during the Covid pandemic when the government gave it a temporary uplift. 

The most contentious element of the reforms is expected to be changes to the eligibility criteria for PIPs, the second-largest single element of the working-age welfare bill.

Some 1mn people face having their benefits cut under the overhaul of PIPs, which means that only the most severely disabled will qualify.

Payments would be denied to many people with mental health conditions and those who struggle with washing, eating and dressing themselves. People in need of a hearing aid are also expected to fall below the new threshold and could lose out on payments. 

Ministers are expected to offer reassurances that the most severely disabled people will still not be expected to work and will not lose entitlement to benefits.

Health secretary Wes Streeting on Sunday said: “If you just continue on the trajectory you are on now, if you don’t start to bend that curve of cost and demand on the system, it becomes unsustainable.”

Speaking to the BBC, he suggested there had been an “over-diagnosis” of mental health conditions in the UK, with “too many people who just aren’t getting the support they need”.

But James Taylor from the charity Scope said: “Tightening the assessment would be a disastrous move and result in hundreds of thousands more disabled people being pushed into poverty.”

A government official said: “Reforms will ensure severely sick and disabled people are always protected while also putting the benefits bill on a more sustainable footing in the long term to unlock growth as part of our plan for change.”