May faces fight over £3.7bn worth of disability payments
Theresa May is facing a high-stakes political battle as the government tries to close a £3.7bn hole in the public finances by stripping benefit entitlements from people with disabilities and health problems.
The government wants MPs and peers to legislate to nullify recent court rulings which broadened the scope of people entitled to personal independence payments: some 160,000 people with conditions including dementia are thought to be affected.
But Labour and the Liberal Democrats are preparing to resist the move, threatening a repeat of the row which last year forced George Osborne, former chancellor, to abandon plans to cut £4.4bn in tax credits for low-income families.
The issue has already caused nervousness at the top of government, amid fears that the issue could undermine Mrs May’s attempt to soften the face of the Tory party and her promise to look after those who are struggling to get by.
Conservative MPs who rebelled against Mr Osborne’s cuts say they are looking at the details of the government’s move on PIPs, which was announced in a low-profile statement from the Department of Work and Pensions on Thursday.
But Labour is planning to raise the issue in an urgent Commons question on Monday and Liberal Democrats in the House of Lords are planning a “fatal motion” intended to block the changes when they are put to the upper house next month.
Debbie Abrahams, shadow work and pensions secretary, said: “By shifting the goalposts, the Tory government will strip entitlements from over 160,000 disabled people, money which the courts believe is rightfully theirs.”
Ministers say the legal rulings before Christmas extended the scope of PIP beyond what was originally intended, creating a hole in the budget of £3.7bn in total over the next five years.
If ministers had not made it clear in written statements that they intended to act to supersede the legal judgments, the Office for Budget Responsibility would have increased the estimates for public spending on PIP ahead of next month’s Budget. Ministers have tabled parliamentary amendments to the PIP regulations “to restore the original aim of the benefit”. Labour is expected to force a vote in the Commons, where Mrs May has a working majority of just 16.
Philip Hammond, chancellor, is determined to keep a tight grip on public spending and is backing the plan to “restore the original aim of the policy and ensure that support goes to those most in need”.
One DWP official said:
One court ruling decided that people with diabetes should be entitled to PIPs because they monitored their condition at home, while ministers contend the policy was intended to help those with the most severe cases.
Another court ruling said that people with “overwhelming psychological distress”, including agoraphobia, should be given assistance with mobility, while ministers claim the policy was originally conceived for people with conditions such as blindness.
A spokesman for Disability Rights UK said of the proposed government changes: “These new regulations will hit disabled people and those with serious health conditions very hard.
“The DWP itself admits this will include those who have a learning disability, diabetes, epilepsy, anxiety or dementia.” The DWP declined to confirm how many people might be affected.
PIP and other disability benefits are expected to cost taxpayers £16.6bn in 2016-17, rising to £19bn by 2021-22.
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