Rachel Reeves has been accused of plunging thousands into poverty (Image: Getty)
Rachel Reeves faces a Labour civil war over benefits cuts as charities warned hundreds of thousands of people will be plunged into poverty. More than three million families could lose out on up to ￡1,720 a year as part of the Chancellor’s plan to slash spending by ￡4.8 billion.
The Government’s benefit cuts are set to push 250,000 people into relative poverty by the end of the decade, the Department for Work and Pensions has revealed.
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This includes 50,000 children, the Government’s own impact assessment has said.
Jon Sparkes, OBE, Chief Executive of learning disability charity Mencap said: “This impact assessment lifts the lid on the devastating impact of changes to PIP and Universal Credit that will plunge 350,000 people into relative poverty, including 50,000 children. 96% of families who will lose out financially have a disabled person in the household.
READ MORE: Rachel Reeves provokes widespread fury as she delivers savage cuts
The benefits cuts could lead to a Labour civil war (Image: Getty)
“The government is justifying its benefit reforms and cuts to spending through increasing support for large numbers of disabled people to enter work, yet there is no detail on how many disabled people they can support into work with the ￡1bn investment.
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“MPs need to consider the consequences of plunging their disabled constituents into poverty, with little prospect of plans on employment support meaningfully mitigating this disastrous situation.”
The basic rate of universal credit will be cut from a projected ￡107 per week in 2029-30 to ￡106 a week. Next month there will be a ￡7 a week increase, to ￡92 a week.
The universal credit incapacity benefit top-up for new claimants, to be halved from next year, will be frozen at ￡50 per week until the end of this parliament.
Ms Reeves confirmed Universal Credit health benefits for new claimants will be halved in 2026 and frozen until 2030.
Existing claimants will see their UC health benefits frozen.
Under the most controversial reforms - restricting eligibility to Personal Independence Payment benefits - the document says 370,000 people will lose support with the average loss of ￡4,500-per-year. It will also impact an estimated 430,000 people in the future who will not get the PIP benefits they would have previously been entitled to.
Left-wing Labour MPs Richard Burgon and Kim Johnson have already vowed to vote against Ms Reeves’s plan.
Mr Burgon said: “This Statement contains cruel attacks on disabled people. The Government is taking the easy option of cutting support for millions of vulnerable people rather than making the wealthiest pay.
“I’ll vote against these cuts to disability benefits. The Government must drop them.”
Ms Johnson said: “Today’s Spring Statement confirms our worst fears. Cuts to PIP and Universal Credit will devastate my constituents. I’ve already received panicked calls and emails from people who simply don’t know how they’ll survive.
“In Liverpool, we know the reality of austerity, poverty and government neglect. We’ve lived through it before and now, under a Labour government, it’s back.”
She added: “I will be voting against any Government legislation to enact these changes. I cannot support measures that will make our most vulnerable poorer and widen inequality across the country.”
And former Labour Zarah Sultana launched a blistering attack on Ms Reeves who “has accepted ￡7,500 worth of free clothing and recently took freebie tickets to see Sabrina Carpenter”.
Ms Sultana told the Commons: “Since Labour came into power, 25,000 more children have been pushed into poverty due to the two-child benefit cap and now, according to the Government’s own impact assessment, over 250,000 people will be pushed into poverty as a result of these cuts, including 50,000 children.
“So I ask the Chancellor, who earns over ￡150,000 annually, has accepted ￡7,500 worth of free clothing and recently took freebie tickets to see Sabrina Carpenter, does she think ‘Austerity 2.0’ is the change people really voted for?”
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Ms Reeves said the national living wage would rise from next month, adding: “There’s nothing progressive and there’s nothing ‘Labour’ about pouring more money into a broken system. Under the changes that we’re bringing about, we’re going to help young people who are not in education, employment or training by giving them targeted support.
“And as I set out in the statement earlier, the OBR (Office for Budget Responsibility) so far have not scored any of the back-to-work programme – which is the biggest back-to-work programme that we’ve seen for many, many years.
“They’re going to do that work over the autumn, but we know that the best way to lift people out of poverty is to get them into good work, secure work, paying a decent wage.”
Until now, the Government had also refused to reveal how many people will lose Personal Independence Payments.
But the number has been revealed to be 800,000, including people who would have received the benefit in the future but now won't.
Jon Trickett, a veteran Labour MP, said he will not vote for the Government’s benefit cuts.
He claimed ministers were effectively “picking on disabled people” and Rachel Reeves should look elsewhere to save money.
The Government expects the measures to save ￡4.8 billion rather than the more than ￡5 billion in 2029/30 hoped for by ministers.
Labour MP Debbie Abrahams, who chairs the Work and Pensions Committee, told the Commons: “I recognise the difficulties that (Ms Reeves) is facing in terms of fiscal challenges and so on that she inherited and I also support the reforms (Work and Pensions Secretary Liz Kendall) has set out.
“But all the evidence is pointing to the fact that the cuts to health and disability benefits will lead to increased poverty, including severe poverty, and worsened health conditions as well.
“How will making people sicker and poorer help in terms of driving our economy up and people into jobs?”
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Ms Reeves replied: “In the green paper we’re consulting on a premium payment for the most severely sick and disabled because as a Government we believe that those people need support should get it.
“But like (Ms Abrahams) I recognise that there are many people who are sick and disabled, there are many young people who could be working but were written off by the previous government and that’s why we’re putting record investment in helping getting those people back to work, with guaranteed, personalised and targeted support.
“You’re half as likely to be in poverty if you’re working, if you move from welfare into work and we’re determined to lift people out of poverty by ensuring there are good jobs paying decent wages with a security that’s guaranteed through the Employment Rights Bill.”