The cuts proposed by Chancellor Rachel Reeves, are set to to slash disability and incapacity benefits by £6.4 billion per year by 2029/30 according to the Office for Budget responsibility.
The OBR states that:
“the economic and fiscal outlook has become more challenging since the Autumn Budget. Domestic output stagnated in the second half of 2024 and business and consumer confidence have trended lower recently. European energy prices have risen again, and government bond yields are up by around ½ a percentage point. The outlook has also become more uncertain with two geopolitical risks highlighted in our 2022 Fiscal risks and sustainability report beginning to crystallise: upward pressure on defence spending and a tightening of global trade restrictions. And recent UK population, labour force, and output”.
So, there is some of what is used as the rationale for the cuts. But what will their impact be in the real world?
It has been noted by many commentators that the cuts will push many families and individuals into dire straits and exacerbate the already huge numbers of children living in poverty. Frances Ryan, writing in the Guardian has noted that:
“Some disabled people could lose nearly £10,000 a year in benefits by the end of the decade under Labour’s controversial disability benefits reforms that will target the living standards of poor and middle income households, experts have forecast.”
I asked Hannah Cooper from Newcastle Citizens Advice Bureau about what the impacts on disabled people and other benefit recipients in the North East will be. What are the aspects of the cuts that Citizens Advice are most concerned about?
Hannah told me that the three proposed changes Citizens Advice are most concerned about are;
- The tightening of PIP eligibility
- Cuts to UC health element of PIP
- Using PIP daily living as the sole gateway to UC health
Hannah argues that, not only will these cuts force many disabled people into poverty and hardship, but they will also not achieve their stated aim of encouraging disabled people into employment. They will also negatively impact on other government objectives. These include reducing child poverty.
Hannah noted that with almost a third of the people Newcastle Citizens Advice help with Personal Independent Payment (PIP) have dependent children. Meanwhile, the number of disabled people who are reliant on charitable support to make ends meet remains worryingly high and will likely increase as a result of these cuts.
What Citizens Advice is asking for
Citizens Advice wants a benefits system focused on fixing problems, that’s there for people when they need it unexpectedly. The system must be about prevention. There is an urgent need for the benefits system and the health service to complement each other.
In order for this to come about, the government must:
- Run a full consultation process on all proposed changes to health and disability benefits.
- Protect the most vulnerable by scrapping proposals to cut disability benefits.
What workers at Citizens Advice are seeing
Citizens advice helped nearly 30,000 people with charitable support and foodbank referrals alone in January 2025. 65% of these people were disabled or had a long-term health condition.
In the past year they have helped more than 370,000 people with disability and incapacity benefits issues. 46% of people who seek our help on all issues are disabled or have a long-term health problem, rising to 64% of those we advise on benefits issues.
The disabled people they help with debt are more likely to be in a negative budget if they don’t receive PIP (a negative budget is where your monthly income isn’t enough to cover your essential costs).
Around a third (29%) of the people they help with PIP have dependent children.
What will government changes mean for people?
Hannah commented that, “the government recently published its impact assessment for the proposed changes. Citizens Advice is extremely concerned that the government predicts 3.2mn families will financially lose out on an average of £1720 per year as a result of these changes.
“We believe that this will particularly impact families with children in contradiction with the government’s stated aim of reducing child poverty. The impact assessment also supports this, suggesting that an additional 250,000 people (including 50,000) children will be in relative poverty after housing costs in 2029/30.
“The vast majority (96%) of families that lose financially have someone with a disability in the household. These families are estimated to represent 20% of all families that report having someone with a disability in the household.
What will be the impact?
Hannah concluded by stating that:
“Citizens Advice is clear that these plans to cut benefits will push disabled people into poverty and away from work”.
North East MPs
The benefit cuts are going to cause a lot of suffering for many people in the North East, a region which according to Office of National Statistics figures from 2024 had the third highest percentage of people living in poverty, before housing costs, of any region or nation in the UK.
It is therefore perhaps no surprise that the Chronicle reported on 28March that some Labour MPs in the North East had announced they were prepared to vote against planned welfare cuts that could “plunge thousands of people into poverty”.
It was noted that, “Northumberland MP Ian Lavery and County Durham MPs Mary Foy and Grahame Morris have all said they are prepared to vote against the planned changes, while South Shields MP Emma Lewell openly criticised the plans. They join more than two dozen MPs who have criticised the reforms, with nine confirming they will vote against the cuts”.
Conclusion
Yet again we see a government making decisions aimed at solving one problem, actually making problems greater in the long-term. The impact on society of greater poverty will be negative and cost more in the long run. This is especially true of child poverty and the impact on education, as is ably demonstrated by Sean Harris and Katrina Morley.
Some economic decisions might make sense on paper and even look good on a spreadsheet. But they have real consequences for real people in the real world.
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