LONDON — Plans to freeze the headline rates of a major U.K. disability benefit are likely to be dropped after a backlash from Labour MPs, two people with knowledge of the proposals have told POLITICO.
Department for Work and Pensions (DWP) officials had been drawing up plans to cancel an inflation-linked rise in spring 2026 to Personal Independence Payment (PIP).
The benefit is paid to 3.6 million people to help meet the costs of disability. The plans have been floated as part of attempts to save £5-6 billion a year from Britain’s welfare bill.
But the proposed freeze — which would likely require primary legislation — prompted a backlash among MPs when it was leaked to ITV News a week ago. Some spoke out publicly and many more expressed concerns privately.
The two people, who requested anonymity to discuss evolving policy, said Friday evening that they believed a PIP freeze would not be part of a green paper on welfare reform to be announced next week. They caveated their comments by saying the plans, which are not yet signed off by Prime Minister Keir Starmer’s Cabinet, had been fluid in recent days.
However, the green paper is still likely to make sweeping changes that will leave campaigners and some Labour MPs unhappy. The two people added that it is still likely to suggest changes to the eligibility criteria for PIP, making it harder to qualify. ITV had reported that this could save billions of pounds a year.
Officials are also still looking at real-terms cuts to the rate for those who are judged as having limited capability for work-related activity under Universal Credit, a separate benefit, the two people said.
Backlash
Many Labour MPs accept the principle of welfare reform. The green paper is widely expected to include reforms to employment support, and to the work capability assessment for sickness and disability payments under Universal Credit.
Prime Minister Keir Starmer told MPs Monday that the system was in a “worst of all worlds situation,” while Chancellor Rachel Reeves told broadcasters Friday: “The current system is not working for anyone … It is not working for people who need support, it’s not working to get people into work so that more people can fulfil their potential, and it’s not working for the taxpayer when the bill for welfare is going up by billions of pounds in the next few years.”
A blanket PIP freeze had appealed to some in government because its simplicity meant it could be “scored” quickly by the fiscal watchdog, the Office for Budget Responsibility, as part of savings to the public finances. Reeves is preparing to give an update on spending in her spring statement on March 26.
But a third person with knowledge of the plans said it had been “very hard” to reconcile a blanket freeze on PIP — which is not linked to employment status — with the reforms’ stated aim of helping people into work.
Ministers expressed concerns privately in a Cabinet meeting, according to Bloomberg, while MPs told No. 10 that some frontbenchers could resign if the plans went ahead, according to the Guardian.
Groups of Labour MPs were invited to speak to Downing Street officials including Political Director Claire Reynolds Wednesday and Thursday.
Earlier in the day on Friday, one frontbencher told POLITICO they would not rule out resignations if the plans went ahead. They said colleagues were “struggling to get No. 10 to understand the feeling about this,” adding: “Some people have come down from the top of the hill on this, but there are some who are still up there.”
The post Freeze on PIP disability benefit likely to be dropped after Labour backlash appeared first on Politico.
