Labour’s benefit cuts might only be worth the price tag of a Premier League striker – here’s why

Tuesday (18 March) was another big day in the long and winding story of the British welfare state as the secretary of state for work and pensions, Liz Kendall, announced a wave of benefit cuts, including the scrapping the work capability assessment and changes to universal credit, as part of her ‘Pathways to Work’ green paper.

Arguably, however, the most significant change was around the tightening of eligibility for personal independence payments (PIP), affecting 3.7 million disabled people, which the government predicts will save the taxpayer some £5bn by 2030.

There was likely a sigh of relief in the chamber of the House of Commons when Kendall announced PIP was indeed not to be frozen, as had been briefed to the media in recent weeks to the fury of many Labour backbenchers.

Read more of Big Issue’s analysis of Labour’s benefit reforms:

• Benefit cuts are a ‘violation of human rights’ which will harm ill and disabled people, Labour warned
• DWP minister ‘regrets’ making disabled people feel anxious over benefit cuts
• The hidden impact of Labour’s disability benefit cuts – from carer’s allowance to railcards

But changing eligibility for this support – which helps to cover the extra costs of disability from higher energy bills, transport and healthcare – could prove to be even more significant than freezing it (we await the Office for Budget Responsibility’s assessment next week).

Regardless, the deeper problem is that shifting the parameters of PIP eligibility has a proven track record both of failing to save the Exchequer money and making life harder for disabled people – surely not an aim any right-minded government would pursue. 

When PIP was introduced a decade ago in 2013, for example, it was meant to save 20% by reassessing claims and tightening support, only for the OBR to later find that just 10% of those savings ever materialised.

The exact same reform announced today was proposed two years later in 2015 to save a projected £6.5bn, but was swiftly abandoned as unworkable, with other attempts in recent years having been scrapped as unlawful or too expensive.

In fact, our own analysis at The Disability Policy Centre of previous attempts to cut PIP found only £0.8bn (just 8%) was ever delivered of the £18bn promised by the government between 2016 and 2021. 

And once you factor in the indirect costs from higher NHS demand, lower disabled household spending and increased review and appeal costs, the actual savings from this latest effort could be as paltry as £100m – a mere 2%. 

The price-tag of a Premier League footballer is probably not what most voters had in mind when they read about the great ‘axe’ this Labour government was going to take to the welfare ‘bill’. 

And it’s in this language that the real problem lies: a big part of the reason why we end up with such unworkable policies is because we frame spending on disabled people as a sunk cost – a bill we would all rather do without.

It’s a special kind of narrative we save especially for welfare and disabled people in particular; you wouldn’t talk about spending on schools, infrastructure and certainly not business in the same way, so why do so many policymakers seem to talk about disabled people as if they’re a net drain on society?

When the reality is, if provided with the necessary support when required, disabled people are CEOs, they’re entrepreneurs, they’re innovators, they’re scientists, they’re pub-going, high-street shopping consumers and they’re taxpayers – who knew?!

An alternative system might dispense with the barge-pole and instead accept disabled people as essential contributors to our success as a society and as a nation. 

It would instead work to remove the barriers disabled people face in the jobs market by, for example, properly incentivising employers to create part-time and flexible roles so those who want to work can work in jobs that suit their needs and go on to thrive and build a glittering career.  

This week’s announcement acknowledges this to some degree by allowing claimants on other health benefits to try work without losing their entitlements, but it’s only a step in the right direction of the country-mile’s worth of progress we need.

Despite the missed opportunity this week’s announcement represented, we at The Disability Policy Centre remain optimistic that this government will see disabled people as a potential solution to, and not a cause of, our languishing economy. We hope further improvements can be made in the forthcoming spending review, in particular, to being to write a new, more positive story about the value disabled people bring to society.

Arun Veerappan is interim research director at The Disability Policy Centre, the UK’s only disability think tank.

Do you have a story to tell or opinions to share about this? Get in touch and tell us more. Big Issue exists to give homeless and marginalised people the opportunity to earn an income. To support our work buy a copy of the magazine or get the app from the App Store or Google Play.