Cabinet united over welfare cuts, McFadden says as ministers brace for backlash

The Cabinet is united behind efforts to slash the welfare bill, one of Sir Keir Starmer’s closest allies said as the Government braced for a backlash to its benefits curbs.

Pat McFadden, the Chancellor of the Duchy of Lancaster and a key figure behind the scenes in the Starmer administration, insisted the plans being unveiled on Tuesday were “entirely in line with the values of the Labour Party”.

Ahead of Work and Pensions Secretary Liz Kendall’s announcement, MPs on Labour’s left and the party’s trade union backers have hit out at the measures, arguing they would punish the disabled and the poor.

Reports have suggested there is also unease around the Cabinet table, with ministers including Deputy Prime Minister Angela Rayner and Energy Secretary Ed Miliband said to have voiced concerns in private.

But Mr McFadden said: “I believe the Cabinet is united behind taking on the issue of the growing benefits bill.”

He told Times Radio the current system “leaves too many people in a permanent state of dependence on benefits without the opportunity of work”.

The Office for Budget Responsibility has forecast that spending on health and disability benefits for working-age adults will increase from £48.5 billion in 2023/24 to £75.7 billion in 2029/30.

The Government hopes to save up to £6 billion from the bill as Chancellor Rachel Reeves struggles to balance the books in the face of weak economic growth and mounting debt interest costs.

Ms Kendall is set to abolish the “work capability assessment” for universal credit, which is used to determine eligibility for incapacity benefit payments for those with illnesses or disability who have limited ability to find a job.

She is also expected to cut the top rate of universal credit incapacity benefit, which The Times said would be partially offset by an increase to the basic rate and £1 billion pumped into support schemes to help claimants get into work.

The most controversial element of the package could be changes to the personal independence payment (Pip) – a benefit aimed at helping the disabled with the increased cost of living associated with their conditions.

Pip is not means-tested and is available to people even if they are working.

Department for Work and Pensions figures on Tuesday showed a total of 3.66 million claimants in England and Wales were entitled to personal independence payments as of January 31.

This is up 12% from 3.27 million a year earlier in January 2024 – and 71% higher than the equivalent figure five years ago.

The Government appears to have shifted away from rumoured plans to freeze Pip, meaning a real-terms cut by not increasing the payments in line with inflation, but reports have indicated they will be harder to qualify for in future.

That could include more frequent reassessments for both Pip and incapacity benefits to determine whether the payments are maintained.

Mr McFadden said: “Reassessments will be part of the package announced today.

“We want people, if they’re on long-term sickness benefits, not to languish there forever, but to be reassessed.

“There have been too few reassessments in recent years.”

But he suggested people with degenerative illnesses or permanent disabilities would be treated differently to those who might have a temporary condition which would allow them to be supported into work.

A series of Labour MPs have already hit out at the plans despite intensive efforts by No 10 to persuade them of the need for change.

Nadia Whittome said she was “gravely concerned by the reforms” reportedly being considered and “frankly horrified” by comments from some ministers, while veteran MP Diane Abbott said there was a “chasm” between “a tiny number of people at the top” and the overwhelming majority of MPs and party members.

Labour Greater Manchester mayor Andy Burnham warned that changes to eligibility and support while leaving the system as it is would “trap too many people in poverty”.

Unite’s general secretary Sharon Graham wrote in the Mirror “we are putting the poorest against the poorest”, while Unison’s Christina McAnea said: “Hitting those least able to speak up for themselves is never acceptable.”