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Evening Standard
Evening Standard
Politics
Rachael Burford

Benefits cuts could force 150,000 more people into poverty despite U-turn, government data suggests

Cuts to Britain's benefits system could push 150,000 people into poverty despite Sir Keir Starmer being forced to U-turn on some of the measures, the government's own data has suggested.

The figure is down from the 250,000 extra people estimated to have been left in relative poverty after housing costs by 2030 under the original proposals.

Modelling published by the Department for Work and Pensions said the data does not include any "potential positive impact" from extra funding to support people with disabilities and long-term health conditions into employment.

The original planned welfare reforms restricted eligibility for personal independence payments (Pip) and cut the health-related element of universal credit in a bid to save £5billion a year from Britain’s benefits bill.

But following a rebellion of more than 120 Labour MPs, the changes to Pip will now only apply to new claims from November 2026.

The changes will reduce the amount the reforms will save, adding to Chancellor Rachel Reeves' headaches as she seeks to balance the books for day-to-day spending.

Work and Pensions Secretary Liz Kendall said the tweaked Bill aims to deliver a "fairer, more compassionate system" ahead of the legislation's second reading on Tuesday.

She will update MPs on the changes on Monday afternoon, with the Labour leadership still braced for a substantial revolt despite the changes aimed at averting a government defeat in the Commons on Tuesday.

A No 10 spokesman said: "The broken welfare system we inherited is failing people every single day.

"It traps millions, it tells them the only way to get help is to declare they'll never work again and then abandons them.

"No help, no opportunity, no dignity and we can't accept that.

"For too long, meaningful reform to a failing system has been ducked."

He said the poverty modelling was "subject to uncertainty" and showed "the effect of these measures on poverty in isolation in 2029-30, it doesn't reflect the full picture".

He added: "You have to look at the record levels of investment in the health and care system, £29 billion more day-to-day funding in real terms, than in 2023-24, to help people get the treatment they need on time to return to work."

An additional £1 billion a year by the end of the decade to help people with disabilities and long-term health conditions into jobs "will directly help people move into work and become financially independent".

The Prime Minister is expected to continue talking to would-be rebels in the lead-up to Tuesday's vote, when the Universal Credit and Personal Independence Bill faces its first Commons test.

Dozens of Labour MPs are expected to still vote against the reforms, despite the last-minute changes made by the government.

The partial U-turn has sparked fears Britain will have a “two-tier” system, with current welfare claimants receiving much higher payments than future recipients who have the same disabilities or conditions.

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